Anaam eyes IPO of subsidiary Wasit Saudi amid higher profitability: CEO

Hassan Al-Yamani, CEO of Anaam International Holding Group

Anaam International Holding Group plans to float 20-30% of subsidiary Wasit Saudi Corp. on Nomu-Parallel Market in 2025 or 2026, said CEO Hassan Al-Yamani, adding that Wasatah Capital was appointed as financial advisor on the planned IPO.

In an interview with Argaam, the top executive indicated that the proposed offering depends on improving the company’s profit to increase its value. Regulatory-wise, Wasit Saudi is ready for listing in the Saudi market, but this depends on the valuation.

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Currently, focus is to strengthen Wasit Saudi’s resources and boost sales of its private sector-focused business segment to accelerate the IPO process. It is working to enter the field of military manufacturing of some light materials, which is expected to be announced soon, according to Al-Yamani.

Wasit Saudi’s sales elevated to SAR 21 million by the end of 2023, compared to SAR 9 million in 2022, with SAR 2.5 million in profit. It is anticipated to generate SAR 36 million in sales, while profit is seen ranging between SAR 6-10 million by the end of 2024, according to the IPO memorandum.

Regarding the contract signed to establish and operate 42 entertainment and educational centers, the CEO said that the contract is valued at SAR 25 million over two years in the first phase. The centers will be distributed across various locations such as malls, public parks and private schools, with Saudi-based PAUSA financing their establishment and operation.

Anaam owns 63% of Wasit Saudi, said the CEO, expecting this agreement to have a positive impact, especially after the start of production, which is likely to begin in Q4 2024.

Commenting on the recommendation to increase capital by 75%, Al-Yamani the SAR 236 million rights issue is aimed to finance strategic projects and reduce the company’s loan balance from SAR 172 million to about SAR 90 million, which would save SAR 5-6 million annually in profit and shore up liquidity within the next five years after debt repayment.

The capital top-up would help acquire companies in the automotive and food sectors. This is while also expanding into the logistics services sector, where the storage area currently amounts to less than 10,000 square meters tons, with an eye to raised to 50% by building a central frozen refrigerator using modern technology.