ADES Holding Company (ADES), a Saudi-based oil and gas firm, said Monday it plans to sell 30% of its stake through an initial public offering (IPO).
The share sale will be a combination of existing and newly issued shares. The Saudi Capital Market Authority (CMA) has approved a proposal of the existing shareholders—ADES Investments Holding, the Saudi sovereign wealth fund the Public Investment Fund (PIF), and Zamil Group Investment—to dilute part of their holding through the IPO.
The CMA also approved the issuance of new shares through a capital increase, representing 21% of the offering, while the sale shares represent 9%, totaling 30% of the issued share capital. According to ADES, the shares will be listed on the Saudi Exchange’s Main Market.
ADES, an oil and gas drilling firm, plans to offer shares to its employees, including those at subsidiaries. These shares will be held as treasury shares until they are transferred to the employees according to the provisions of the long-term incentive scheme, the company said.
The IPO proceeds will be distributed to the selling shareholders in proportion to their holding, ADES said. The remaining funds will be used to pay down some of the group’s outstanding debt and finance its strategy for achieving its growth objectives.
The shares will be offered to individual and institutional investors, while the maximum quota for individual investors is fixed at 10% of the total offer.
The company has appointed EFG Hermes Saudi Arabia, Goldman Sachs Saudi Arabia, JPMorgan Saudi Arabia, and SNB Capital Company as its financial advisors and global coordinators. SNB Capital Company has also been appointed as the lead manager for the offering.
Besides, the company has appointed EFG Hermes Saudi Arabia, Goldman Sachs Saudi Arabia, JPMorgan Saudi Arabia, SNB Capital Company, GIB Capital, HSBC Saudi Arabia, Al Rajhi Capital, and Saudi Fransi Capital as bookrunners and underwriters for the offering.
“ADES’ IPO on the Saudi Exchange marks an important milestone for the company and is a key step in realizing our ambitious growth strategy," said Mohamed Farouk, CEO of ADES.
ADES reported $528 million (SAR 1.98 billion) in total revenue in the first half of 2023, while the company's margin of earnings before income, tax, depreciation, and amortization (EBITDA) stood at 47%. The oil and gas company also posted $7.4 billion (SAR 27.6 billion) in total backlog as of June this year.
ADES owns a fleet of 85 rigs across seven countries, including 36 onshore drilling rigs, 46 jackup offshore drilling rigs (four of which are leased), two jackup barges, and one mobile offshore production unit (MOPU).
