By Asma Alsharif
Knowledge Economic City to hand out contracts worth SR1.5bn in 2010.
Knowledge Economic City Co (KEC), which is building a huge industrial complex for the Saudi Arabian government, wants to raise over 1 billion riyals ($267 million) in a public offering early next year, its top executive said.
KEC is one of four so-called economic cities that Saudi Arabia is building to diversify its economy away from oil and to provide jobs for a burgeoning population.
Chief Executive Tahir Bawazir told Reuters that the firm will hand out contracts worth 1.5 billion Saudi riyals ($400 million) next year.
"Thirty percent of the company will go public. It is now in the process. It is with the capital market authority," Bawazir said.
State-owned King Abdullah Foundation is the biggest shareholder in KEC, with a 29 percent stake. Around 41 percent are held by other founders of the firm including food group Savola Group, industrial conglomerate Bin Laden Group and Taiba Investments.
KEC's IPO plans come on the heels of news this week that three other Saudi firms intend to come to the market early next year.
The Saudi bourse, the Arab world's biggest, has been the best performing Gulf Arab market this year.
KEC anticipates its capital will reach 3.4 billion riyals after the IPO and it intends to develop some 5 million square metres of land, attracting 32 billion riyals in investment.
Under government plans, the new city will have 30,000 residential units and aims to attract information technology companies and health and education centres, as well as hospitality firms.
The project is located close to the holy Muslim city of Medina, which KEC hopes will help it benefit from the millions of pilgrims who visit Medina and Mecca, Islam's holiest cities, every year.
The company has received bids for the city's power network and plans to sign a contract by the first quarter of 2010, one of many to be signed next year.
"Next year we will sign contracts that will be worth around 1.5 billion (riyals) ... which will be awarded to trigger the first phase of construction," Bawazir said. (Reuters)