DUBAI- Saudi Basic Industries Corp (SABIC) has selected HSBC and Morgan Stanley to work on the planned initial public offering (IPO) of its specialty chemicals business, two sources familiar with the matter said.
SABIC, the world's fourth-biggest petrochemicals firm, hired Saudi investment bank NCB Capital earlier this year to work on the public share sale, which sources said could raise several hundred million dollars.
The specialty chemicals business brings in about $2 billion in sales each year for SABIC, which is controlled by state oil giant Saudi Aramco , one of the sources, and a third source, said.
The unit produces speciality engineering thermoplastic resins and compounds, composites, thermosets and additives, according to information on its website.
SABIC, HSBC and Morgan Stanley declined to comment.
The country had a flurry of public offerings last year as companies tap into Saudi demand for shares since oil giant Aramco's record IPO in 2019.
Saudi Arabia is encouraging more companies to list in a bid to deepen its capital markets under reforms aimed at reducing its reliance on oil.
With a market capitalisation of $2.5 trillion, Saudi Arabia's bourse, Tadawul, is the Arab world's largest stock exchange.
Theeb Rent-a-Car Co, part owned by private equity firm Investcorp, earlier this month raised 516 million riyals ($137.59 million) by offering 30% of its shares.
($1 = 3.7503 riyals)
(Reporting by Hadeel Al Sayegh and Saeed Azhar; additional reporting by Arno Schuetze in Frankfurt; editing by David Evans) ((Hadeel.AlSayegh@thomsonreuters.com; +971566883310;))