The share price for the initial public offering (IPO) of Mohammad Al-Mojil Group (MMG) has been fixed at SR70 ($18.7) representing a par value of SR10 and a premium of SR60.

The share price has been determined based on the successful closure of the institutional bookbuilding process, a statement said.

HSBC Saudi Arabia Limited is the financial advisor and lead manager for the issue.

The total size of the offering, consisting of 30 million shares, representing 30 per cent of the company’s share capital, is SR2.1 billion, it said.

Thirty per cent of the IPO will be offered to Saudi individuals, and the remaining 70 per cent will be offered to selected institutional investors.

The lead manager reserves the right to reduce the institutional allocation from 70 per cent to 30 per cent in the event that retail demand is sufficient and upon approval of the Saudi Capital Market Authority (CMA). The minimum retail subscription is 10 shares and the maximum is 500,000 shares.

Osama As’ad, director of investment banking at HSBC Saudi Arabia Limited, said all Saudi banks will serve as receiving banks in order to facilitate the participation of all Saudi citizens in this offering, which will open for subscription on May 3, 2008 and close on May 12, 2008.

“The level of bidding among institutional investors for this landmark IPO was extremely strong,” said As’ad.

Mohammad Al-Mojil Group is Saudi Arabia’s premier industrial construction and construction services company.

“Although acceptance of the bids was pre-conditioned on them being fully funded prior to final allotment of shares on offer, investors have shown strong support to the maximum IPO price range, as none failed to bid at the maximum price range.  Bids were placed by qualified institutional investors who are licensed by the CMA. This bookbuilding exercise is backed by firm deposits from institutional investors, and hence represents a significant shift in the process previously applied in the market,” he added.

“The books were open for five business days following a very successful management roadshow, which was highly rated by the participating institutions,” said As’ad. “MMG represents a compelling equity story, and we are extremely pleased with the results, with bids supporting the highest end of the price range and covering the entire IPO – including both institutional and retail tranches – at two times.”

Established more than 50 years ago, MMG has grown to become one of Saudi Arabia’s largest industrial construction companies, with 24,000 employees working on significant projects across the Kingdom. To date, MMG has completed projects worth more than SR37.5 billion.

The company registered record-breaking revenues of SR1.96 billion last year, up 119 per cent compared to 2006. During the same period, the company’s net income soared to SR548.57 million, up 164 per cent compared to 2006. In 2007, the company’s gross profit rose to SR634.84 million, an increase of 145 per cent compared to the previous year. – TradeArabia News Service