Saudi cargo firm SAL draws $49 billion of orders for IPO

Riyadh: Cargo firm SAL Saudi Logistics Services received orders worth $48.6 billion for its $678 million initial public offering, which is set to be the kingdom’s second-largest this year.

Institutional investors put in bids for 72 times the shares made available to them, according to a statement on Thursday, demonstrating ongoing demand for the offering as the Saudi IPO market springs back to life after a virtual standstill at the start of the year.

The offering price was set at SR106 per share - the top of a marketed range, valuing the company at SR8.48 billion. Saudi Arabian Airlines and Tarabot Air Cargo Services are offering 24 million shares - a 30 per cent stake - in the IPO.

SAL’s IPO is set to be the kingdom’s largest after the $1.2 billion offering of oil driller ADES Holding, which also drew strong demand from investors. A resurgence of listings since September has more than doubled the country’s IPO haul for the year, which stood at $2.4 billion before SAL, data compiled by Bloomberg show.

Saudi Arabian offerings started to pick up at the start of the summer on higher oil prices after a drop in the kingdom’s stock market put a brake on listing activity. Crude has recently given up some of those gains as concerns over higher interest rates and the global economy cloud the demand outlook.

SAL is the leading cargo handling player in Saudi Arabia with a roughly 95 per cent market share. It also handles transit and export shipments. The kingdom has outlined an ambition to become a global supply chain hub and develop one of the largest airports in the world as part of its plans to diversify the economy.

Retail investors will be able to place orders for SAL from October 11 to October 13. HSBC Holdings’ Saudi unit is managing the IPO.