Riyadh: The Saudi Arabian Mining Company — Maaden — yesterday announced its intention to go public. It will offer 462,500 — or 50 percent — of its shares via an Initial Public Offering (IPO) in early July 2008. The share price is SR20 of which SR10 is nominal value and SR10 is premium. This was set in accordance with the decision of the Council of Ministers (number 72 dated 3/4/1427H). A proportion of these shares will be made available to investment funds and licensed individuals.
“The allocation to retail subscribers will take place in two stages. In the first stage, each subscriber will get a minimum of 25 shares,” said Maaden’s President and CEO, Abdallah Dabbagh at a press conference to announce the IPO.
“During the second stage, up to 2,000 shares will be allocated to subscribers who have applied for more than 25 shares as long as the total shares allocated do not exceed total shares offered to retail subscribers. The balance of the Offer Shares, if available, will be allocated on a pro-rata basis.”
The period for public subscription to the IPO will be from July 5-14, 2008. Prior to the issuing of the IPO, Ma’den will publish a prospectus for investors containing information about the company. Details of the share price, financial statements and other information about the company, its activities and management will be set out for potential investors.
The announcement of the IPO, no surprise to Saudi market watchers, comes at a time when Maaden is on something of a charge to expand and achieve its aim to be the third pillar of the Saudi economy. Earlier this month, it signed a Heads of Agreement with Rio Tinto Alcan to develop an integrated “mine-to-metal” project which will produce 740,000 tones of aluminum within the minerals industries complex at Ras Az Zawr in the Eastern Province. Late last year it finalized arrangements with Saudi Basic Industries Corporation (SABIC) to develop the Kingdom’s substantial phosphate deposits.
Commenting on the IPO, Dabbagh said that the decision to offer shares was both part of Maaden’s expansion strategy and broaden the ownership base among Saudi public.
“Maaden has achieved a pioneering position in the mineral sector at national and regional levels, and intends to further strengthen this position,” he said.
Maaden is the first company in the region to invest in major projects in the mineral sector. Currently, Maaden is involved in investments of SR60 billion in its projects to develop gold and industrial minerals as well as the bauxite and phosphate projects. It comes at a time of heightened economic development in the region and the Kingdom in particular.
“Maaden adopts recognized industry’s best practices and latest technologies to succeed in its aims of becoming a world class minerals enterprise and achieving value for its shareholders,” Dabbagh noted.
The mining giant is also Saudi Arabia’s largest gold producer, delivering around 200,000 ounces of gold a year in addition to other precious and base metals, including silver and zinc. The company’s gold and base metals division operates five mines which have combined reserves of 1.3 million ounces of gold ore.
Maaden also has an ambitious exploration program that has identified 8 million ounces of measured, indicated and inferred resources.
Dabbagh said that he anticipated high demand for the shares offered by the company due to its strong reputation within the Kingdom and investor confidence generated by its track record in the mineral sector.
He also commented that the offering will be the largest floatation in the region’s minerals sector and the first of its kind in Saudi Arabia.
He also offered his appreciation to the Capital Market Authority for its support during preparation for the offering.
