By Claire Valdini
CEO says IPO is “mandatory”; will list up to 30 percent of healthcare giant’s value
Jeddah-based healthcare provider Saudi German Hospitals Group (SGH) plans to list its shares on the Saudi Tadawul within two years, its president and CEO told Arabian Business.
The group, which operates eight private hospitals in the region, said an IPO would ensure the family-owned firm’s continuity, said Sobhi A Batterjee.
“We are planning to go public and we are working on it now. We are a family business and listing is mandatory for succession,” he said.
“[An initial public offering] would cash in on some of the work that we have done in Saudi Arabia….Transforming a company into a public company is my next milestone, in the next two years,” he added.
Saudi Arabia’s capital markets law mandates that companies must float at least 30 percent of their value.
The number of regional family-owned companies looking to go public plunged in the wake of the economic downturn amid weak investor sentiment due to underperforming stock markets and risk aversion.
IPO activity is starting to show some signs of recovery amid renewed investor confidence and increasing share price levels across the Gulf.
Regional capital markets in GCC raised a total of US$78m via two listings in the first quarter of 2012. Both initial public offerings were hosted on the Saudi Arabia's Tadawul, according to data from PricewaterhouseCoopers.
Dubai’s Al Habtoor Group last week said it is considering an IPO in Dubai given strengthening local equity markets. The conglomerate, a holding company for businesses ranging from construction, hospitality, automotive and real estate, did not give a timeframe for the listing.
“The Al Habtoor Group is considering an IPO amid further strengthening of the UAE’s prominent position in the capital markets and increased inflows from the euro zone,” the group said following a company meeting with senior executives from the Dubai International Financial Centre (DIFC) Authority and Nasdaq Dubai.
“The group already has a high level of corporate governance and its financial statements are prepared under IFRS (International Financial Reporting Standards) and audited by an independent firm,” it added.
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