Saudi Steel Pipes Co (SSPC) will seek to raise SR400 million ($106.7 million) in an initial public offering of a 31.4 percent stake this week to help finance expansion plans, the company said. The firm will offer 16 million new shares to local investors at SR25 each, it said in a statement. The share price, fixed after a book-building process, values the company at SR1.275 billion. Local banks will take subscription requests from June 27 until July 3. The firm, which earmarked 700,000 shares for its 447 employees, has said it would use the IPO proceeds to help finance two expansion projects worth SR646 million in partnership with other investors. The biggest of the two plans consist of building a new export-oriented pipe manufacturing plant, which will cost SR485 million and will open by 2012, it said. The plant will be able to produce 200,000 tons of products per year, the firm said without indicating its equity share in the project. The second project consists of building a pipe coating plant at an estimated cost of SR161 million. The firm will hold a 50 percent stake in the plant. SSPC's Managing Director Riyad Al-Rabee'a said the demand for steel pipes in Saudi Arabia exceeds 1.7 million tons per year. He noted that the specialized kinds of pipes are imported from abroad to meet the Kingdom's requirements at the gigantic oil projects and for implementing expansion of water and electricity networks. In a statement, he said the wheel of development in the Kingdom has enabled the steel pipes industry to attain a remarkable success. SSPC has been working to meet the increasing demand for pipes through production in line with the best international standards.
