Dubai: Saudi travel agency Al Tayyar Travel Group will soon relaunch its initial public offering after the book-building process failed to attract enough demand from institutions, Al Arabiya Television reported Sunday, citing the firm's chief executive.
Al Tayyar, which sells holiday packages, books airline tickets, and has a cargo-handling business, had been planning to offer 24 million shares a 30 per cent stake of the company from February 22 through February 28.
It is the first IPO by a travel services company for the Saudi bourse, the Arab world's largest equity market.
Institutional investors didn't have enough time to examine the firm's fin-ancial statements due to the school break, Nasser Al Tayyar told the Dubai-based channel.
The book-building process by institutions should have covered 100 per cent of the offered shares in order to allow 50 per cent of the offered shares to be sold to retail investors, he said.
The company's 2009 net profit rose to 395 million Saudi riyals (Dh385.7 million) compared with 279 million Saudi riyals a year earlier, Al Tayyar added.
One local trader said the cancellation of Al Tayyar Travel Group's IPO indicates that investors have become choosier and doesn't suggest a change in investor appetite.
"I think it's more of a sector-specific issue travel agency is not the most enticing business in the world, especially given the run up in crude and better opportunities in banks and petrochemicals. Sentiment is generally pretty upbeat locally," he said.
Expansion plans
The Riyadh-based firm has said it plans to raise 1.2 billion Saudi riyals from the IPO to finance its expansion plans.
Al Tayyar said earlier this month that his company wants to spend 500 million Saudi riyals over the next couple of years to expand its operations into other countries, including United Kingdom and Australia.
Al Tayyar already has offices in the Middle East, Thailand, India, Malaysia, Canada and the United States.
