Shareholders of electronics retailer eXtra will vote next month on the proposed IPO of a 30% stake in the subsidiary that owns and operates Tasheel Finance, the company’s non-bank financial services arm.

It’s not clear how much eXtra hopes to raise from the listing, nor has the timeline for the Tadawul IPO been made public.

The rundown: The United Electronics Company, better known as eXtra, is asking shareholders to vote on the transaction next month. It owns 99% of the United International Holding (UIHC), which in turn owns the United Company for Financial Services, which operates Tasheel as well as Procco Financial Services in Bahrain. eXtra Bahrain owns 1% of UIHC.

It’s shaping up to be a secondary sale: All proceeds will go back to eXtra, with none of the cash being captured at the UIHC level. That’s likely because UIHC doesn’t need the money:

UIHC is doing very nice margins: The company turned in net income of SAR 156.8 mn for 9M 2023, up nearly 12% year on year — and good for a 41% net margin given that it posted revenues of SAR 383.2 mn in the same period. The company is led by CEO Sakhr Almulhem (LinkedIn).

What they’re building: UIH says it wants to be the largest provider of shariah-compliant consumer finance in the Kingdom operating across multiple categories. It benefits from access to the 14 mn customers that pass through eXtra’s 48 stores across the country and is broadening the base of companies that it works with.

Go deeper: The company released a circular (pdf) yesterday explaining the transaction to eXtra shareholders ahead of the vote.

Timeline: Shareholders are being asked to vote on the UIHC IPO from Friday, 15 March through Tuesday, 19 March ahead of an extraordinary general meeting of shareholders on 19 March. We’ll know by Wednesday, 20 March if shareholders approve the transaction.

ADVISORS- Our friends at HSBC have been hired to quarterback the transaction.

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