The Arab Technical Contracting Company in Saudi Arabia announced its intention to offer 30% of its shares for public subscription, and then list its shares on the main market at the Saudi Tadawul.
The company stated in a statement today, Sunday, that on June 28, 2021, it obtained the approval of the Capital Market Authority to offer 15 million shares for public subscription, equivalent to 30% of its total capital of 50 million shares.
The company, which was established in 1983, clarified that the final price of the offering price will be determined for all subscribers at the end of the book-building period.
Al Arabiya is considered the largest company operating in the field of outdoor advertising in Saudi Arabia in terms of revenue.
Arab Technical Contracting ranked 14th among the largest companies operating in the field of outdoor advertising around the world in 2018, and 12th in terms of revenue in 2019.
The company owns, as on December 31, 2020, about 4942 billboards on both sides of the road and 73 indoor billboards, distributed in 28 cities around the Kingdom.
The Arab market share of spending on outdoor advertising in Saudi Arabia reached 65.6%, 65.8%, and 62.3% in the years 2018, 2019, 2020, respectively.
The company’s market share of the total spending on the advertising market in the Kingdom was estimated at 22.5%, 30.2% and 22.9% in 2018, 2019 and 2020, respectively.
The company said in its statement, that it achieved strong profitability from a historical point of view, and despite the negative effects imposed by the spread of the Corona pandemic, it achieved profits in 2020 and maintained its leadership position in the market.
Particular importance of the offer
The Chairman of the Board of Directors of the Arab Company for Technical Contracting, Abdul-Ilah Abdul-Rahman Al-Khuraiji, stated that the company’s strategic decision to offer its shares for public subscription is of special importance for individual and institutional investors.
Al-Khuraiji explained that Arabia Technical Contracting is the only company in the market that integrates all its services in the outdoor advertising sector, and that operates according to a clear strategy for growth, and is based on a model of solid and growing development that has proven its success over more than 38 years, during which the company achieved leaps of systematic growth. And it contributed to increasing advertising and marketing awareness after introducing the latest global advertising tools to the Kingdom.
He added that the announcement of Al Arabiya’s intention to list 30% of its shares in Tadawul is a historic event for the company, as the initial public offering of the company’s shares will enhance its growth path, support its leadership position in the advertising sector in the Kingdom of Saudi Arabia, and enable it to fully benefit from the available opportunities.
The company indicated that GIB Capital will assume the role of financial advisor, lead manager, bookrunner for institutional underwriting and the main underwriter in relation to the offering, while Albilad Capital will play the role of the underwriter.
The National Bank of Saudi Arabia, Bank Albilad, The Saudi British Bank (SABB), and Riyad Bank were also designated as recipients.
The offering will be limited to two tranches of investors, which are the participating categories (this segment includes the categories that have the right to participate in the process of building the order book in accordance with the instructions for building the register of orders and allocating shares in the initial subscriptions issued by the Authority, and the number of offering shares that will be initially allocated to the participating categories 15 million shares, representing 100% of the offered shares, and the final allocation will be after the end of the period for individual subscribers.
In the event that there is sufficient demand from individual subscribers to subscribe to the shares allocated to them in the offering shares, the director of the institutional subscription register has the right to reduce the number of the offering shares allocated to the participating classes to 13.5 million ordinary shares, representing 90% of the total offering shares, and the number and percentage of the offering shares that are to be offered are determined. It will be allocated to the participating classes by the financial advisor in consultation with the company and the selling shareholder using the optional allocation mechanism.
As for the second tranche, the company clarified that it includes the segment of individual subscribers of Saudi natural persons, including a divorced or widowed Saudi woman who has minor children from a non-Saudi husband – where she has the right to subscribe in her name or in the names of her minor children for her benefit, provided that she submits proof that she Divorced or widow and proof of her motherhood for minor children, and any non-Saudi resident natural person or citizens of the Arab Gulf Cooperation Council countries who have a bank account, and are entitled to open an investment account, and a maximum of 1.5 million shares of the offering shares will be allocated to individual subscribers, equivalent to a percentage of 10% of the total offering shares, and in the event that individual subscribers do not subscribe to the full number of the offering shares allocated to them, the manager of the institutional subscription register has the right to reduce the number of shares allocated to individual subscribers to match the number of shares that have been subscribed to by these subscribers.