Jbel Omar to raise $536m with its IPO this year

Riyadh: Saudi real estate developer Jbel Omar plans to raise 2.01 billion riyals ($536 million) by floating a 30 per cent stake in its initial public offering this year, a major company shareholder said on Wed-nesday. The company will raise its paid-up capital from 5,300 billion riyals to 6,710 billion riyals, Makkah Construction Company said in a statement posted on the Saudi bourse's website.

Shares in Makkah Construction, which holds 22 per cent stake in Jbel Omar, closed 2.27 per cent lower at 992 riyals after initially rising by up to 6.9 per cent on Wednesday after the announcement was made.

However the stock, which was suspended on Wednesday morning pending the announcement, gained 9.97 per cent on Tuesday on a turnover of 2.07 billion riyals.

"The market was aware that Jbel Omar is to go public and that Makkah Construction was to gain from the IPO. But the announcement seems to have leaked on Tuesday which has triggered the erratic movements in the stock price," a senior trader said.

Jbel Omar plans to invest 10 billion riyals over seven years to build towers housing hotels, apartments, shops and restaurants in Makkah.