In Saudi Arabia's latest IPO, Arabian Drilling sets price at SR100, issue over-subscribed 61x

Dubai: Arabian Drilling has set its IPO offer price at the top end of the range, at SR100 a share, and which would lead to a market cap of SR8.9 billion ($2.4 billion) at listing time. At the start of the subscription, the company had set the target range at SR90-SR100.

For Tadawul itself, this sets up another potential big winner in the Kingdom’s IPO hustings. Last week, the Saudi utility company Marafiq's $897 million IPO was fully covered within hours. It's been the pattern with most Saudi IPOs year-to-date.

As one of the bigger names in the space it occupies, Arabian Drilling will also gain from the slew of projects expected within Saudi Arabia’s energy industry. The company’s book-building generated an order book of SR162 billion ($43 billion) and resulted in a 61x over-subscription coverage.

“Global investors have come to recognize the significant and integral role we play – and will continue to play – in the oil and gas value chain in the Kingdom,” said Ghassan Mirdad, CEO. “We specialize in both onshore and offshore drilling with a fleet of 45 rigs serving four key clients and operating principally in KSA.

“The demand for our services remains high, especially given the elevated commodity price environment and concerns around energy security as a result of the current macro-political and economic landscape. We also have plans to grow and expand further into the GCC, where we are also witnessing strong demand increases.

“The investment case is robust, and the demand for our shares has ensured a successful institutional fundraising phase. We now look forward to on-boarding the retail investors, who make up a core and important element of our offering and shareholdings.”

Share offer mix

The offering comprised 26.7 million shares split between a secondary offering of 19.89 per cent by existing shareholders – TAQA (The Industrialization & Energy Services Company) and Services Pétroliers Schlumberger; and the primary offering of 10.11 per cent through the issuance of 9 million new shares.

All of the offer shares are provisionally allocated to the participating parties in the book-building. “This may be reduced to 24.03 million offer shares (or 90 per cent of the total) depending on the level of demand by Individual Investors,” the company said in a statement.

Saudi Arabian nationals, foreign residents in the Kingdom and GCC nationals will be able to subscribe for shares in the retail offering on October 18 and 19 at SR100 per share. The receiving agents which are The Saudi National Bank, Al-Rajhi Bank and Riyad Bank