Developer of $8bn Saudi economic city to seek approval for initial public offering by year-end.
The developer of Saudi Arabia's $8 billion Prince Abdul Aziz bin Mousaed Economic City will seek approval for a 1.5 billion riyal ($400 million) initial public offering by year-end, a company executive said yesterday.
Rakisa Holding, which had planned to sell 30% of its shares to the public in the first quarter, said in April it would delay the sale until May due to a Gulf stock market slump.
"There were some delays because of land ownership documentation, which still hadn't been transferred from the government," Ibrahim Hashem, corporate communications manager at Rakisa, told Reuters yesterday from Riyadh.
Rakisa is now finalising the prospectus and expects to submit its application in the next two weeks, Hashem said, declining to give a timeframe for the sale.
Hashem said Rakisa had reduced its capital to 5 billion riyals from 7 billion after the government put power supply for the city under the responsibility of Saudi Electricity Co.
Rakisa had planned to build a 2 billion riyal power plant, Hashem said.
Rakisa is leading the consortium developing the project at Hail, about 700 km (435 miles) north of Riyadh. The development will include a new airport as well as industrial and residential areas. US firm KBR is advising Rakisa on the construction, Hashem said.
Emaar Economic City, which is building a port and financial centre on the Red Sea coast, raised $680 million last year in the first IPO by a developer of one of six new cities planned by the world's largest oil exporter.
The cities are part of a government plan to tap the windfall from record oil prices to develop infrastructure and create jobs.
Two more cities are planning to sell shares to the public next year. Saudi Arabia's Binladin Group and Malaysia's MMC plan to sell 30% of the jointly owned Jizan Economic City to help finance the $30 billion development.
Seera City Real Estate Development, which is developing the Knowledge Economic City in Medina, said in October it would raise around $267 million in an IPO next year.
Some 40 firms will sell shares to the public in Saudi Arabia in 2008, in offerings worth up to $8 billion, or twice this year's total, the investment banking arm of state-owned National Commercial Bank (NCB) said November 11.