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Maaden IPO oversubscribed two times
Published in The Saudi Gazette on 18 - 07 - 2008

Saudi Arabian Mining Comoany's (Maaden) 9.25 billion riyals ($2.47 billion) offering, the Middle East's largest ever mining IPO, was over two times oversubscribed, advisers of the sale said yesterday. The IPO, which was open only to Saudi investors, defied a “challenging” context marked by the global downturn, JP Morgan equity syndicate head Rupert Fane said.
“If you have a $2.5bn transaction ... that was over two times covered for both (retail and institutional) tranches ... is a huge success against that backdrop,” he said.
JP Morgan was appointed sole bookrunner and financial adviser for the ten-day sale which closed on Monday.
“This is the first IPO we have done in Saudi Arabia,” Fane said, declining to give details on other issues his company is currently working on in the Middle East.
Shares in Maaden will begin trading by end-July, Fane said.
Maaden offered 462.5 million worth of shares - equivalent to 50 percent of its share capital - at 20 riyals each.
The IPO is to cover some of the costs of projects led by the company, mainly a 720,000-ton aluminum smelter with Rio Tinto and a 3m tons phosphate and by-products plant with Saudi Basic Industries Corporation.
Fane said the smelter will export 70 percent of its output and the bauxite mines in the Kingdom can cover 30 years of production. The phosphate plant, due to start production in 2010, will account for 10 percent of global trade in diammonium phosphate, Fane said. The other 50 percent of Maaden's capital is held by the state-run Public Investment Fund.
Maaden estimates its total investments at 60 billion riyals, including phosphate, bauxite, gold and industrial minerals. The investments are part of government plans to diversify an economy that heavily depends on oil.


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