Wednesday 23 May 2018

Binladin, MMC plan IPO for Jizan Economic City

Riyadh, October 28, 2007

Saudi Arabia's Binladin Group and Malaysia's MMC Corp plan to sell 30 percent of a jointly owned developer to the public next year to help finance a $30 billion Saudi city, an executive said on Sunday.

The sale, initially planned for 2007, will raise cash for Jizan Economic City in Saudi Arabia's south as part of a government plan to tap the windfall from record oil prices to develop infrastructure and create jobs.

Emaar Economic City, which is building a port and financial centre on the Red Sea coast, raised $680 million last year in the first IPO by a developer of one of six new cities planned by the world's largest oil exporter.

Another of the six, Seera City Real Estate Development Co, said on Sunday it would raise around $267 million in an IPO next year to finance an education and technology hub near Islam's second holiest shrine in Madinah.

The developer of Jizan, near Saudi Arabia's southern border with Yemen and 725 km (450 miles) south of the commercial city of Jeddah, is equally owned by MMC and construction conglomerate Binladin Group.

The company will meet its financial adviser in the next two weeks to decide the timing of the Saudi IPO and how much it will raise, Hassan Alsagoff, head of corporate services at Jizan Economic City, told Reuters.

"It should be in the second half of next year," he said, declining to name the adviser.

The developer will need to raise around $13 billion to fund the 30-year project, which will initially consist of a power plant and port, MMC Corp's chief executive officer Feizal Ali said last year. The remaining $17 billion will come from the partners' coffers.

Jizan's developer was initially considering an IPO in 2007, Ali said.

Earlier this month MMC and Binladin Group agreed to build an aluminium smelter costing $3 billion in Jizan Economic City with Aluminium Corp of China, the world's second producer of alumina.

Construction should begin by the second half of 2008, MMC said.

MMC shares, controlled by Malaysian tycoon Syed Mokhtar Al-Bukhary, have more than doubled since it announced the $30 billion Jizan contract on Nov. 6 last year.

Seera, owned by investors including food company Savola Group and property developer Taibah, is also looking to sell 30 percent of its shares to the public "in the middle of next year", chief executive Tahir Bawazir said.

"It's most likely 1 billion riyals, but it's subject to finalisation," he told Reuters of the value of the IPO.

Seera is building Knowledge Economic City which will cover a 4.8 million square-metre (51.67 million sq ft) area, housing information technology companies and research institutions. - Reuters      

Tags: malaysia | MMC | Jizan Economic City |

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