Riyadh: The Initial Public Offering (IPO) of PetroRabigh Refining and Petrochemical Company opened yesterday with 219 million shares, or 25 per cent of the company's total shares, worth 4.6 billion Saudi riyals available for subscription.

The share price has been fixed 21 Saudi riyals, representing 10 riyals par value and 11 riyals premium.

PetroRabigh is a joint venture between Saudi Aramco and Sumitomo Chemical of Japan.

Saeed Bin Fahd Al Dosary, PetroRabigh president and CEO, said, "The company is keen to enhance the efficiency of its business in a way that guarantees long-term profits. This IPO provides Saudi investors with a great opportunity to take part directly in pushing forward the sustainable economic development cycle and diversification of investments in the kingdom.

"The PetroRabigh complex is one of the largest refining and petrochemicals manufacturing projects in the world. It benefits from the acquisition of stable and long-term raw materials with low costs. It is also strategically located."

Tcheky Sumitomo, CEO for finance and member of the PetroRabigh board said that PetroRabigh represents a new generation of Saudi companies as it possesses ambitious global vision supported by long experience.

HSBC, the IPO's financial adviser, said that 50 per cent of the shares will be allocated to Saudi individuals and the other 50 per cent to institutional investors.

It added that the com pany reserves the right to reduce the institutional allocation from 50 per cent to 25 per cent in the event that retail demand is sufficient and upon approval of the Saudi Capital Market Authority (CMA).

"Shares worth a maximum of 37.5 million riyals shares will be allocated to Petro Rabigh employees," said Timothy Gary, CEO of HSBC.

He pointed out that the allocation to retail subscribers will be performed in two stages.

In the first stage, each subscriber will receive a minimum of 10 shares.

During the second stage, each subscriber for 50 shares or less will receive the full allocation of the application, provided that the total shares allocated do not exceed total shares offered to retail subscribers.