HSBC Saudi Arabia Limited, the Financial Advisor and Lead Manager for the initial public offering (“IPO”) of Rabigh Refining and Petrochemical Company (“Petro Rabigh”), has announced that the preparation work for Petro Rabigh IPO is proceeding smoothly. Timothy Gray, the Chief Executive Officer of HSBC Saudi Arabia, has confirmed that all receiving banks’ branches will be ready to receive investors’ applications for 219 million shares between Saturday 5/1/2008 until the last day of subscription on Saturday 12/1/2008.
Mr. Gray mentioned that the share price has been determined based on the institutional book building process at SR 21 representing SR 10 par value and SR 11 premium, with a total offering size of SR 4,599 million. 50% of the IPO shares will be offered to Saudi individuals and the remaining 50% will be offered to selected institutional investors. The Lead Manager reserves the right to reduce the institutional allocation from 50% to 25% in the event that retail demand is sufficient and upon approval of the CMA. The minimum subscription is 10 shares and the maximum is one million shares.
With regard to the allocation of shares, Mr. Gray mentioned that a maximum of SAR 37.5 million worth of shares will be allocated to Petro Rabigh employees. The allocation to retail subscribers will be performed in two stages: in the first stage, each subscriber will get a minimum of 10 shares.
During the second stage, and in the event there is a sufficient demand by retail subscribers, each subscriber for 50 shares or less will get full allocation of what he applied for provided that total shares allocated do not exceed total shares offered to retail subscribers (162,464,286 shares). The balance of the Offer Shares (if available) will be allocated on a pro-rata basis.
The Company has appointed all local banks as receiving banks in order to facilitate the participation of all Saudi citizens in this Offering.
Mr. Gray said that the reason behind the delay in announcing the above information is the need to coordinate with the Japanese partner (Sumitomo Chemical) which is a publicly listed company in Japan that has certain disclosure requirements towards its shareholders and the regulators of the stock market in Japan.
Petro Rabigh, a 50:50 joint venture between Saudi Aramco and Sumitomo Chemical launched in September 2005, is one of the largest combined oil refinery and petrochemical production facility ever to be built at one time. Saudi Aramco will supply Petro Rabigh with the feedstock necessary to operate the plant, including ethane, on a long-term, fixed-price basis and will market the refined products produced by Petro Rabigh. Sumitomo Chemical will provide petrochemical international sales and marketing expertise, as well as technology licensing.
