ADES pulls the trigger on its IPO: Cairo-born regional oil and gas services company ADES International has announced its intention to float (pdf) on the Saudi Tadawul. The company is planning to offer a 30% stake (338.7 mn shares), which could raise more than USD 1 bn, Bloomberg previously reported.

Existing shareholders are selling part of their stakes: Almost a third (101 mn) of the shares offered will come from existing shareholders — Intro Group subsidiary ADES Investments Holding, Saudi Arabia’s Public Investment Fund (PIF), and Zamil Investment. The remaining 237 mn will be newly-issued shares via capital increase. The company didn’t disclose how many shares the individual shareholders will sell.

The current breakdown: Intro Group’s ADES Investments Holding owns the majority 54.5% stake, the PIF owns 35.5%, and Zamil Investment owns 10.0%.

ESOP: The company will also issue up to 33.9 mn new shares — or 10% of the total offered shares — to company employees.

The company will hold a five-day book building process from 10-14 September, after which it will announce the final share price on 18 September. ADES will open the door for retail investors to subscribe on 20-21 September. Trading on the shares is set to commence “after all relevant regulatory requirements are satisfied.”

It’s been a long time coming: ADES has been mulling a Riyadh listing since at least last year but the process has reportedly stalled due to unfavorable market conditions. The Saudi Capital Market Authority in June approved ADES’ application to offer the shares on the Saudi exchange, giving it a six-month window in which to go public.

Where is the money going? The IPO proceeds that don’t go to the selling shareholders will go towards reducing the company’s outstanding debt and financing its growth plans.

Advisors : The company has tapped our friends at EFG Hermes, Goldman Sachs, JPMorgan, and SNB Capital to act as financial advisors, global coordinators, bookrunners, and underwriters on the transaction. SNB Capital has also been appointed lead manager. Our friends at HSBC, GIB Capital, Al Rajhi Capital, and Saudi Fransi Capital will also act as bookrunners and underwriters to the offering. Lazard Financial Advisory is ADES’s independent financial advisor.

From public to private and back again: The company was trading on the London Stock Exchange until 2021 when it was delisted following a takeover backed by the PIF.

Why do we care? The company started life here in Egypt, where it maintains a significant presence. It derived 18% of its revenue locally in 2019 (ahead of a sustained push to expand its regional operations), according to a 2020 investor presentation (pdf). It is currently the country’s largest offshore driller. The company has also been reported as saying it could look into a dual listing on the Egyptian Exchange after its Saudi debut.

Tags: