Arabian Centres, a leading owner, operator and developer of contemporary lifestyle centres in Saudi Arabia, said it plans to raise nearly SR2.47 billion ($658 million) through an initial public offering (IPO) that will see the company sell 95 million shares at SR26 to SR33 per share.

Out of this, 65 million will be existing shares to be sold by the current shareholders and 30 million new shares to be issued by the company by way of a capital increase, stated the company.

The offering will be the first in the kingdom under Rule 144a, which allows the sale of securities primarily to qualified institutional buyers in the US, it added.

Owned by Fawaz Alhokair Group, the Saudi firm said the IPO will lead to a market capitalisation of between SR12.4 billion and SR15.7 billion.

A major player in the retail sector, Arabian Centres aims to expand its operations to 27 malls within the next four years, including four in the next 12 months.

Four cinemas are already under construction, with 12 more to come over the next two years, said the statement.

According to Arabian Centres, the gross primary proceeds are expected to be between SR780 million and SR990 million/$208 million and $264 million which will be used for debt repayment.

The IPO will comprise 95 million offer shares to parties entitled to participate in the book-building process (“Institutional Tranche”) in accordance with the CMA Instructions on Book-Building and Allocation of Shares in Initial Public Offerings.

Following the completion of the institutional tranche, the offer shares will also be offered to individual
investors in Saudi Arabia (Retail Tranche).

Initially, 100% of the offer shares will be provisionally allocated to the institutional offering. This may be reduced to 85.5 million offer shares (representing 90% of the total offer shares) depending on the level
of demand by individual investors in the kingdom, said the statement.

The final number of offer shares allocated to the Institutional Tranche will be accordingly adjusted based on subscription from individual investors in the Retail Tranche, it added.

Morgan Stanley, Samba Capital, NCB Capital, and Goldman Sachs are the joint financial advisers and bookrunners for the IPO. The other bookrunners include EFG Hermes KSA, Citigroup, Emirates NBD Capital, Credit Suisse, and Natixis.-TradeArabia News Service