Retail subscription to Al Arabia IPO starts today

Logo of Arabian Contracting Services Co. (Al Arabia)

Retail investors start, today, Oct. 26, subscription to 1.5 million shares of Arabian Contracting Services Co. (Al Arabia), at SAR 100 a share, determined by the book-building process.

On June 28, 2021, the Capital Market Authority (CMA) approved the company's request to offer 15 million shares, or 30%, of its SAR 50 million share capital in an initial public offering (IPO).

It allocated 90% of the total offered shares to institutional investors, while the remaining 10% were allocated to retail subscribers.

Retail subscription will last three days, ending Oct. 29, 2021.

This is the sixth IPO on the Saudi Exchange (Tadawul) in 2021, following Alkhorayef Water & Power Technologies Co., Theeb Rent a Car Co., Tanmiah Food Co., solutions, and International Company for Power and Water Projects (ACWA Power).

The Saudi market saw three IPOs in 2020, namely Dr. Sulaiman Al-Habib Medical Services Group in February, Amlak International for Real Estate Finance Co. in July, and BinDawood Holding in October.

Company Info:

Al Arabia was established in 1983 in Riyadh as a limited liability company, and it was converted into a closed joint stock company in 2006, with a current capital of SAR 500 million.

The company’s main business activity includes setting up, operating and maintaining outdoor advertising billboards and selling advertising spaces.

Recently, the company expanded its scope of business by entering the indoor advertising market, and concluded a number of exclusive contracts with owners of commercial centers in different regions within the Kingdom.

Company's Clients

The company's clients include media buyers, advertising agencies, and major companies that carry out their advertising campaign directly.

The following table shows the details of the company's revenues divided by different customer categories:

Revenue as per Client Type in 2020
Client Type	Revenue (SAR mln)	Percentage to Total
Media Buyers	334.4	67%
Direct Advertisers	110.6	22%
Direct Government Clients	26.9	6%
Other	25.7	5%
Total	497.6	100%

Company Profile
Company	Arabian Contracting Services Co.
Market	The Saudi Exchange (Tadawul)
Core Activities	The business includes setting up, operating and maintaining outdoor advertising billboards, including road and indoor advertising.
Capital	SAR 500 mln

IPO Summary
Issue Percentage (%)	30%
Number of Shares Offered to Individual Investors	1.5 mln, or 10% of the 15 mln total offered shares
Issue Price	SAR 100/share
Qualified Subscribers	Retail investors, comprising Saudi nationals, including Saudi female divorcees or widows with minor children from a non-Saudi father. It also includes any non-Saudi natural person who is a resident in the Kingdom and any GCC national, who holds a bank account with one of the receiving entities.
IPO Minimum Limit for Retail Investors	10 shares
IPO Maximum Limit for Retail Investors	300,000 shares
Retail Offering Period (3 days)	Oct. 26-28
Final Allocation of IPO Shares	Nov. 4
Surplus Refund	Nov. 4
Use of Proceeds	The net proceeds, after deducting all the offering expenses amounting to SAR 35 million, will be distributed to selling shareholders, according to their ownership percentage in the offering. The company will not receive any part of the proceeds.

Additional Information
Financial Advisor, Lead Manager, Underwriter and Bookrunner	GIB Capital
Co-underwriter	Albilad Capital
Receiving Banks	Riyad Bank, Saudi National Bank, Saudi British Bank, Bank Albilad

Engineer Holding Group Co. will be the largest shareholder in the company after the IPO, with 65% stake.

Company Shareholders
Shareholders	Before IPO		After IPO
Shareholders	Number of shares (mln)	Ownership%	Number of shares (mln)	Ownership%
Abdelellah Abdulrahman Al-Khereiji	12.50	25.00%	--	--
Engineer Holding Group Co.	35.00	70.00%	32.50	65.00%
MBC Group Holding Co.	2.50	5.00%	2.50	5.00 %
Public	--	--	15.00	30.00%
Total	50.00	100%	50.00	100%

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