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Tue 22 Jan 2019 02:18 PM

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Saudi retail giant said to restart plan for IPO for malls

Sources say Fawaz Alhokair Group is reviving IPO plan for its Arabian Centres unit

Saudi retail giant said to restart plan for IPO for malls
Arabian Centres raised a 7.2 billion riyals loan last May.

Fawaz Alhokair Group, whose billionaire co-founder was detained in Saudi Arabia’s declared corruption crackdown, is restarting work on the initial public offering of its Arabian Centres malls unit, people familiar with the matter said.

The group is working with Moelis & Co, Morgan Stanley, Samba Financial Group and NCB Capital on plans to sell 30 percent of the company and list the shares on the Saudi stock exchange, the people said, asking not to be identified because the information is private.

Arabian Centres has applied to the markets regulator for the sale, which could happen in the second quarter of this year, the people said.

The conglomerate has been planning the IPO since 2014 when it hoped to raise $2 billion. It delayed plans in 2015 after the Saudi stock exchange slumped and again in 2017 when Fawaz Alhokair, who’s a major shareholder in the group and in fashion retailer Fawaz Abdulaziz Alhokair & Co, was among princes, ministers and billionaires held at the Ritz Carlton in Riyadh on accusations of corruption.

Alhokair was freed in January along with several other prominent businessmen and officials after agreeing to a settlement deal with the government, a senior official said at the time. Arabian Centres raised a 7.2 billion riyals ($1.9 billion) loan last May.

Saudi Arabian stocks are enjoying their best start to a year in more than two decades amid improving prospects for oil prices and ahead of their long-awaited inclusion in major global benchmarks.

The main Saudi equities index has climbed more than 7 percent since the start of the year, the best performance for the period since Bloomberg records began in 1995.

The increase, more than that of any other major gauge in the Gulf, follows a gain of about 15 percent in the price of Brent crude -- the kingdom is the world’s largest oil exporter.

Fawaz Alhokair Group, NCB Capital, and Samba didn’t immediately respond to requests to comment. Morgan Stanley and Moelis declined to comment. Reuters reported the company’s plan to sell shares this year on Monday.

Fawaz Alhokair Group listed its Alhokair Fashion Retail unit on the Saudi Stock Exchange in 2006. The company is the franchise partner for Gap, Banana Republic and Steve Madden in the kingdom, according to its website. Its Arabian Centres mall unit owns 19 shopping centers in Saudi Arabia.

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