Riyadh: Saudi Arabia’s sovereign wealth fund raised 2.29 billion riyals ($610 million) from the sale of a 10 per cent stake in the kingdom’s stock exchange as part of its plans to pare down holdings in some of the country’s biggest companies and fund other investments.
The Public Investment Fund sold 12 million shares in Tadawul Group Holding at 191 riyals each, a 9 per cent discount to their last closing price. Investors put in orders for all the stock on offer within an hour of the books opening on Thursday, the latest example of strong demand for share sales in the Middle East.
The fund is at the center of a plan, known as Vision 2030, to diversify Saudi Arabia’s economy. As part of these efforts, it’s pushing ahead with plans to reduce its stakes in some of the kingdom’s biggest companies, Bloomberg News reported last month.
The PIF, chaired by the Crown Prince Mohammed Bin Salman, plans to invest $40 billion locally a year until 2025 and help bankroll ambitious projects, including Neom - a $500 billion city intended to attract new industries. It has also plowed billions of dollars into stock markets and assets globally.
The fund has investments in companies across a range of industries from Saudi Electricity to utility Acwa Power. It owns majority stakes in the $53 billion commodities firm Saudi Arabian Mining and $54 billion carrier Saudi Telecom, as well as holdings in lenders including Saudi National Bank, Riyad Bank and Alinma.
About a year ago, the PIF sold a 30 per cent stake in Tadawul in a $1 billion initial public offering and the bourse operator’s shares have since doubled. The fund also raised $3.2 billion from the sale of a stake in Saudi Telecom Co. in December last year.
IPOs have been booming in the Middle East since last year on rising oil prices and investor inflows into the region at the start of the year, however follow-on offerings have been rarer. Since the start of 2021 there have been just 8 secondary share sales in the region, data compiled by Bloomberg show.
HSBC Holdings Plc and Morgan Stanley were joint global coordinators for the Tadawul sale. The PIF will continue to hold 60 per cent of Tadawul post the offering and will be subject to a 90-day lockup.
