SAL Saudi Logistics, a major logistics and supply chain solutions provider in Saudi Arabia, plans to go public. Owners Saudia Airlines and Tarabot Air Cargo Services are set to offer a 30 percent stake in the company. The initial public offering (IPO) will be listed on the Saudi Exchange (Tadawul).
This IPO news comes as more companies such as ADES Holding and Lumi Rental are listing shares for public acquisition. All this is helping the stock market gain momentum after a sluggish start this year.
For SAL Saudi Logistics’ public offering, Saudia and Tarabot Air Cargo Services will jointly offer 24 mn shares. Saudia currently holds a 70 percent stake in SAL, while Tarabot owns the remaining 30 percent. The IPO will be conducted in two phases, targeting institutional and retail investors.
SAL dominates the Saudi cargo handling sector with a 95 percent market share. It operates across 18 airports, including Riyadh, Jeddah, Medina, and Dammam, providing transit and export shipments.
The company reported revenues of SAR1.22 bn and a net income of SAR362 mn for 2022. During the first half of the current year, it saw a 15 percent year-on-year revenue growth and a 24.5 percent increase in EBITDA.
Furthermore, the logistics giant earmarked over SAR1.5 bn in capital expenditure to meet the expected increase in cargo handling demand through 2030. An amount of SAR600 mn has already been invested and an additional SAR906 mn is planned for the medium term. This further supports Saudi’s vision to become a global supply chain hub in an effort to diversify its traditionally oil-driven economy.
More IPOs in Saudi
Especially in the past few weeks, Saudi has been seeing a surge in offerings. For instance, ADES Holding Co.’s recently announced IPO aims to raise up to SAR4.6 bn.
This IPO, poised to become Saudi’s largest this year, has a price range of SAR12.5 to SAR13.5 per share, potentially valuing the company at up to SAR15.2 bn.
ADES, specializing in oil and gas drilling, is offering 237.1 mn new shares to the market. In addition, its existing shareholders, including the Public Investment Fund (PIF), Ades Investments Holding Ltd, and Zamil Group Investment Ltd, are divesting about 101.6 mn shares. Collectively, this represents a 30 percent stake of the company.
Currently, it has a fleet of 85 rigs across seven countries and serves major clients, including Saudi Aramco and Kuwait Oil Company.
Lumi Rental Co.’s IPO efforts also indicate a strong investor interest in Saudi share sales. Lumi is one of the biggest car rental companies in Saudi.
The IPO price is SAR66 per share, making the total offering SAR1.089 bn, while the market value at listing will be SAR3.63 bn. Its institutional book-building process garnered orders totaling about SAR102.9 bn, showing that the offering was 94.5 times oversubscribed.
With developments like this, prospects for Saudi’s stock market remain bright. Further bolstering this optimism is the 12 percent surge in the Tadawul index, which has experienced lows in March.
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