EFG Hermes completes advisory on Ali Alghanim and Sons Automotive’s $323mln private placement

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EFG Hermes announced Monday that it had completed an advisory for Ali Alghanim and Sons Automotive Company’s $323m private placement ahead of its initial public offering (IPO) on Boursa Kuwait.

The upcoming IPO marks a significant milestone for EFG Hermes, as this is going to be the firm’s first IPO on the exchange where it will act as a joint bookrunner for the offering.

Ali Alghanim and Sons Automotive Company, an official distributor of coveted vehicle brands in Kuwait, Egypt, and Iraq, listed 124.8 million shares — representing 45% of its share capital — at a price of 793 Kuwaiti fils per share, implying a market capitalization of $717m and making it the first IPO in the Kuwaiti stock market since 2020.

The private placement garnered strong demand from investors, and was oversubscribed approximately 11 times with a total demand of more than c. $3bn. The stock’s trading will commence on 7 June.

“The fact that our first listing in Kuwait will also be the first IPO to come out of the market since 2020 is proof positive of the traction we’ve built in the GCC and underscores our ability to bridge the gap between global capital and compelling local opportunities even amid challenging market conditions,” said Mohamed Abou Samra, Managing Director of EFG Hermes’ Investment Banking division. “The GCC has seen fresh listings recently as countries in the region work to deepen their capital market under the umbrella of wider-scope economic reform plans. Kuwait in particular is expected to see renewed interest in the market, as evidenced by the solid demand from a multitude of local, regional, and global investors on the listing of Ali Alghanim and Sons Automotive. We expect to continue to capitalize on this uptick in activity, having already lined up several ECM transactions in the region in the year ahead.

Companies in the GCC raised over $22bn in primary and secondary offers in the past 12 months. The entry of Kuwait in the key emerging market indices in 2019-20 means that the market is now on the radar of fund managers investing hundreds of billions of dollars. Recently, EFG Hermes’ Investment Banking team have succeeded in identifying and closing successful cross-border transactions in the GCC, such as the UAE-based Agthia Group’s acquisition of Kuwait’s Al Faysal Bakery and Sweets that they completed last year.

The listing is an integral step towards institutionalization and aims to diversify the shareholder base, enhance corporate governance, and broaden Ali Alghanim and Sons Automotive network and visibility among key stakeholders. With distribution spanning Kuwait, Egypt, and Iraq, it offers investors access to a large and growing automotive market in the region.

Established in 1986, Ali Alghanim and Sons Automotive Company is a pioneer in the automotive sector and has grown to become home to some of the world’s most luxurious automotive brands in Kuwait. Its facility extends over 22,000 square meters of land, and it operates one of the largest showrooms in the world.