Saudi Arabia’s Fakeeh Hospital May Sell 30 Percent Stake in IPO

Dr. Soliman Fakeeh Hospital, owner of one of Saudi Arabia’s largest private hospitals, may sell a 30 percent stake through an initial public offering after the kingdom opens its bourse to foreign investors.

“We’re applying corporate governance standards and we are ready to go for listing whenever we feel the market conditions are appropriate,” Mazen Fakeeh, president and chairman of the group, said in an interview in Dubai yesterday. The hospital would probably sell shares “within the next three years,” he said.

The company, which opened its first hospital in the kingdom in 1978, plans to spend 1 billion dirhams ($272 million) building a 300-bed hospital and a research-focused university in Dubai. The Silicon Oasis-based project will be the company’s first expansion outside its home market. It will be followed by construction of a diabetes care center in Dubai in about two years, Fakeeh said.

Saudi Arabia, the biggest economy in the oil-producing Gulf Cooperation Council, may open its stock market to foreign direct investment from April, three people briefed on the plans said last month. Opening the market may prompt MSCI Inc. to include the bourse in its emerging market gauge by 2017, luring as much as $40 billion of foreign cash, Schroders Plc said in July.

Dr. Soliman Fakeeh Hospital will fund about 40 percent of the project and will use bank loans to pay for another 30 percent, the chairman said. The remaining 30 percent will be offered to investors through a private placement, which Ernst & Young LLP was hired to help with, Fakeeh said.

Work on the hospital in Silicon Oasis started last month and the project will be completed in two phases in 2017 and 2019, he said.