Saudi utility Marafiq seeks to raise $897m in share sale

Marafiq, the Saudi Arabian utility whose shareholders include Aramco and Sabic, aims to raise as much as $897m from an initial public offering in what would be the second-biggest share sale in the kingdom this year.

Power and Water Utility Co. for Jubail and Yanbu, as the company is formally known, set the price range for its IPO at between SAR41 ($10.9) and SAR46 a share, it said in a statement. The company would have a market value of $3.1bn at the top end of the price range.

While a regional equities rally has since faltered and Saudi stocks briefly entered a bear market last month, IPOs have continued at a fast clip with issuers looking to take advantage of continued strong demand for share sales.

Marafiq’s IPO is the largest in the kingdom since pharmacy chain Nahdi Medical Co. raised $1.4bn. Last month, a Saudi Arabian oilfield-services company got enough orders for all shares on offer within hours.

Book-building for Marafiq’s IPO opens on Sunday and lasts until October 14, followed by a retail offering from October 26 to October 29. Marafiq has hired banks including HSBC Holdings and Riyad Capital to manage the process.

Shareholders who own 5 per cent or more in Marafiq are the Royal Commission for Jubail and Yanbu, Public Investment Fund, Saudi Aramco Power Co. and Saudi Basic Industries Corp.