The Power and Water Utility Company for Jubail and Yanbu (Marafiq) has announced plans to go ahead with its Initial Public Offering (IPO) and listing of its shares on the Saudi bourse Tadawul.
The Marafiq move comes following the recent approval from Capital Market Authority (CMA) it received for the listing of 73.1 million ordinary shares, representing 29.24% of the company’s issued share capital. Nearly 51.2 million shares will be allocated to institutional investors.
Earlier this year, Bloomberg had reported that Marafiq was aiming to raise SR4.5 billion ($1.2 billion) through the sale of a 30% stake and that it had hired HSBC Holdings and Riyad Capital to manage the IPO.
A major player in the regional utility sector, Marafiq was established, as per the Royal Decree issued in October 2000, as a joint stock company owned by four main shareholders - Saudi oil giant Aramco, the Royal Commission for Jubail and Yanbu, Saudi Basic Industries Corporation (Sabic) and the Public Investment Fund. Each shareholder has a 24.81% stake, while investors from private sector own 0.76%.
According to Marafiq, the offering, after taking into account minority shareholders, will correspond to a 30% free float at listing.
The final price at which all subscribers in the IPO will purchase shares will be determined at the end of a book building process, it added.
On the upcoming IPO, Khalid M. Al Salem, the Chairman of the Board of Directors of Marafiq, said: "Marafiq is a critical component of Saudi Arabia’s industrial ambitions, which are central to the kingdom’s Vision 2030. With our strong foothold in two of Saudi Arabia’s most strategically important industrial cities and a growing presence throughout the kingdom, the IPO is an opportunity for investors to not only benefit from our steady and reliable cash flow but also to be part of an exciting growth story."
Marafiq is an integrated utilities services provider with presence across the power and water value-chain.
Together with its various subsidiaries, Marafiq is responsible for providing utilities services in strategic Royal Commission industrial cities in the Kingdom of Saudi Arabia and is expanding its presence across the kingdom.
Lauding the move, President & CEO Mohammed Al Zuabi said: "Today’s announcement marks an important milestone in Marafiq’s journey, a journey which began almost 20 years ago when we started providing power and water services in Jubail and Yanbu. We have since become an integrated utilities provider offering a full suite of services across the utilities value chain with a growing footprint across the Kingdom of Saudi Arabia."
The IPO announcement comes at a time when Marafiq is working on several major projects in the kingdom such as Jeddah Airport 2 Independent Sewage Treatment Plant project which is on track to launch its commercial operations in Q1 2023.
The 500,000 cu m/day capacity project is being implemented by Marafiq under a Build, Own, Operate and Transfer (BOOT) concession model.
"With our track record of operational excellence and the highest standards of service quality, we have built long-lasting relationships with some of the world’s largest industrial companies, and we are looking forward to helping them achieve their ambitions in the growing Kingdom of Saudi Arabia.”
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