Saudi Arabian Mining Company Ma'aden announced in Riyadh Saturday the launch of its long awaited initial public offering (IPO) of 462.5 million shares comprised 50 percent of the company shares. The public subscription of Ma'aden shares each priced at SR20 – SR10 for nominal value and SR10 as a premium will start from July 5, 2008 for a week's time. The IPO is expected to raise a little over than SR9 billion for the company. The receiving banks will be announced at a later date. Dr. Abdullah Dabbagh, Ma'aden President and CEO announced the first ever IPO of the government-owned mining company at a crowded press here. Abdullah Al-Fallaj, Ma'aden Vice-President, Finance and Salam Al-Khunaizi of JP Morgan were also present. JP Morgan has been appointed as the lead manager while as lead underwriter. The price of SR20 per share, made up of SR10 as nominal value and SR10 as a premium has been set in accordance with the decision of the Council of Ministers number 72 dated 3/4/1427H, said Dr. Al-Dabbagh. Additionally, a proportion of these shares will be made available to investment funds and licensed individuals, he said. Dr. Dabbagh said public subscription of the IPO will be open for a week's time from July 5, 2008 until the end of working hours on July 14, 2008. Dr. Dabbagh the allocation of shares to retail subscribers will take place in two stages. In the first stage, each subscriber will get a minimum of 25 shares while during the second stage up to 2,000 shares will be allocated to subscribers who have applied for more than 25 shares. However, he said this will be done as long as the total shares allocated do not exceed the total shares offered to retail subscribers. “The balance of the offered shares, if available, will be allocated on a pro-rata basis,” he said. He further said that before the IPO Ma'aden will publish a prospectus for investors containing information about the company, which will also include share price, financial statements and company's activities and the management. Dr. Dabbagh spoke about Ma'aden's expansion plan saying that the company has a number of licenses to start new exploration on a number of new projects. However, he said large portion of the funds raised through the current IPO would be invested in the ongoing phosphate project, which has huge potential because of its size and capacity. “The decision was part of fulfilling the company's expansion strategy and broaden its ownership base among the Saudi public,” he said. Ma'aden has achieved a pioneering position in the mineral sector at national and regional levels, and intends to further strengthen this position, he said.” “We are very proud to be the first company in the region investing in major projects in the mineral sector especially at a time of such heightened economic development in the region and in the Kingdom in particular, he said. Ma'aden is currently engaged in significant investments such as SR60 billion to develop phosphate and bauxite reserves along with gold and industrial minerals that the company already mines, he said. He said Ma'aden is a recognized industry because of its adoption of best practices and latest technologies all aimed at becoming the world class mineral enterprise and achieving value for its share holders. Through its recently signed joint venture agreement with the Saudi Basic Industries Corporation (SABIC), Ma'aden has started construction of world scale plants to manufacture phosphate fertilizer for export around the world. The desert Kingdom of Saudi Arabia will contribute to greater agricultural productivity through the annual production of three million tons of diammonium phosphate (DAP) thereby helping to feed the world. The phosphate will be mined in the north of Saudi Arabia and processed at Ras Az Zawr, a new purpose-built industrial complex and port. The project will create employment opportunities for young Saudis and bring new technologies into national industries. The company is also forging ahead with its aluminum project which will exploit the considerable bauxite deposits in middle Saudi Arabia to produce alumina and ultimately aluminum for domestic and international markets. The company recently signed a Heads of Agreement with Rio Tinto Alcan to develop this integrated “mine-to-metal” project which will produce 740,000 tones of aluminum within the minerals industries complex at Ras Az Zawr in the Eastern Province. Ma'aden is Saudi Arabia's largest gold producer, delivering around 200,000 ounces of gold a year in addition to other precious and base metals, including silver and zinc. The company's gold and base metals division operates five mines which together have 1.3 million ounces of gold ore reserves. Ma'aden also has an ambitious exploration program that has identified 8 million ounces of measured, indicated and inferred resources. As regards the Kingdom's ambitious Saudization program Dr. Dabbagh said it will be always be Ma'aden priority to train and employ the young Saudis. He said around 50 percent of the miners working for Ma'aden are Saudi nationals. A training program in cooperation with Arar College and Jubail Technical College are already on cards to prepare sufficient number of Saudi youths for employment in Ma'aden, he said. He said Ma'aden's expansion strategy of its activities would not be at the expense of country's environment protection efforts. He said adopts best practices and adheres to international standards for environment projtection. Dr. Dabbagh said the proposed IPO will be the largest floatation in the region's minerals sector and the first of its kind in Saudi Arabia. The official anticipated that the high demand for Ma'aden shares offered by the company was due to its strong reputation within the Kingdom and investors' confidence generated by its track record in the mineral sector. __
