Saudi petrochemical giant SABIC aims to launch a SR2 billion ($533 million) public share offering in its planned YANSAB subsidiary by early next year, its chief financial officer said .
“The target is the year-end, or early in the next year,” Mutlaq Al-Morished told Reuters after SABIC announced it appointed Samba Financial Group yesterday as financial adviser for the initial public offering (IPO).
SABIC will offer investors a 35 percent share in the Yanbu National Petrochemicals Company (YANSAB), which will have a paid-up capital of SR5.625 billion. It will keep a 55 percent stake and offer the remaining 10 percent to partners in two of its subsidiary companies, Ibn Rushd and Taif. Only Saudi investors are eligible to subscribe to IPOs in the Kingdom.
The exact timing of the IPO, one of the largest upcoming issues in Saudi Arabia, will depend on approval from Saudi authorities, SABIC said.
YANSAB - located in the industrial city of Yanbu on the Kingdom’s Red Sea coast — will produce four million tons per year of ethylene, propylene, polyethylene and other petrochemicals. It is due to start production in 2008.
SABIC, the Middle East’s largest non-oil company, plans to invest $20 billion in the next three years to expand production to 64 million tons a year by 2008 from 43 million tons now. In September, it said investment between now and 2020 could reach $70 billion.
The company reported net profit last year of $3.8 billion. Profit in the first three months of 2005 has already topped that, although the pace of profit growth slowed in the third quarter as petrochemical prices eased.