Saudi Airlines Catering Company will commence trading on the kingdom's stock exchange on July 9, a bourse statement said, after completing a 30-per cent initial public offering which was more than twice covered by investors.

The catering unit of Saudi Arabian Airlines raised SR1.3 billion ($346.7 million) from the share sale, which was sold to the public between June 18 to 24 following a bookbuilding period involving institutional investors.

The sale of shares in the firm, delayed since late 2010 due to issues securing regulatory approval, had been keenly awaited by investors as it is the first part of the Saudi flag carrier, one of the kingdom's largest state-owned entities, to be listed on the stock market.

Saudi Arabian Airlines started a process of privatisation in 2006 by splitting into six units: catering, cargo, maintenance, airlines, flight academy and ground handling. It plans to privatise each unit and offer shares in them to the public.

The ground services unit is expected to be the next to offer shares to the public, according to bankers in the kingdom.

In total, 24.6 million shares priced at 54 riyals were offered in Saudi Airlines Catering Company, with half of each being allocated to retail and institutional investors.

The retail tranche was 2.2-times covered, while the institutional piece saw subscription worth twice the allocation, according to figures from the lead manager, Saudi Fransi Capital - the investment banking arm of Banque Saudi Fransi.

Saudi Hollandi Capital, a unit of Saudi Hollandi Bank , underwrote the offering alongside Saudi Fransi.

Shares in Saudi Airlines Catering Co will be classified under the Agriculture and Food Industries section of the Tadawul index.-Reuters