EFG Hermes wraps up advisory on $323m private placement ahead of Ali Alghanim and Sons’ IPO

EFG Hermes’ Investment Banking division has completed the advisory on Ali Alghanim and Sons Automotive Company’s $323m private placement ahead of the initial public offering (IPO) on Boursa Kuwait.

The upcoming IPO is the firm’s first IPO on the exchange where it has acted as joint bookrunner for the offering.

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

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

Mohamed Abou Samra, MD of EFG Hermes’ Investment Banking division, said: “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.”

He added: “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 capitalise on this uptick in activity, having already lined up several ECM transactions in the region in the year ahead.”

Companies in the GCC have 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 institutionalisation 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.

EFG Hermes’s investment banking team also recently advised on Borouge plc’s IPO worth 2bn, and Dewa’s IPO, the largest ever in Dubai at a value of $6.1bn.

Read: EFG Hermes completes advisory on $6.1 bn DEWA IPO