JEDDAH: Saudi investors have reacted to the initial public offering (IPO) of United Electronics Company (eXtra) with massive enthusiasm.
The total subscription in the eXtra IPO reached SR851,138,200 by the close of the offering, according to financial adviser and lead manager HSBC Saudi Arabia.
The SR396 million offering, which was open for subscription to all Saudi nationals and consisted of 7.2 million shares, representing 30 per cent of the company's share capital, closed on Sunday.
Kareem Madi, associate director, Investment Banking Advisory, HSBC Saudi Arabia Limited, said 15,475,240 shares were subscribed by both individual and institutional investors.
Madi also said 260,898 individuals subscribed to 7,477,990 shares with a total value of SR411,289,450. Eligible institutions and funds subscribed to 7,997,250 shares with a total value of SR439,848,750, he added.
Total proceeds from the two tranches covered 214.9 percent of the entire IPO, Madi added.
He said a minimum of 10 shares had been allocated to each subscriber, while the remaining shares were allocated to subscribers based on a pro rata basis.
This was calculated based on taking the amount of shares subscribed for by each subscriber as a percentage to the total number of shares being subscribed for, resulting in an average of 20 percent of their total subscribed shares.
Abdullah Abdulatif Al-Fozan, chairman of eXtra, said: "I would like to express my sincere gratitude to all our investors for their show of confidence in eXtra. The enthusiasm shown by Saudi investors to the eXtra offering demonstrates their confidence in the company's strong fundamentals and long-term ability to capture growth opportunities in the market."
Currently, eXtra provides the over 9 million customers it serves annually with more than 12,000 products across its 22 stores -- serving 90 percent of the population of Saudi Arabia.
The company has announced that it intends to open two more stores by the end of this year.
In addition, eXtra recently introduced its online shopping portal, the first fully fledged electronics and home appliance website of its kind in the Kingdom.
In both 2010 and 2011, eXtra was cited by the Saudi Arabian General Investment Authority (SAGIA) as one of the Kingdom's fastest-growing companies.
In addition, eXtra was recently named, for the second consecutive year, as one of the top 50 brands in the Kingdom in recognition of its exceptional growth and sustained commercial success.
© Arab News 2011
