A subsidiary of eXtra is making its way to Tadawul: The United International Holding Company is planning to offer a 30% stake on Tadawul’s main market, according to a statement by the Capital Market Authority.

BACKGROUND- UIHC is the non-bank financial services arm of electronics retailer eXtra. The CMA has given UIHC the okay to sell 7.5 mn shares. The regulator provided no further details beyond its standard note that the UIHC’s prospectus would be published “within sufficient time prior to the start of the subscription period.”

What we know: eXtra’s shareholders approved in April the offering, which the company hopes to take to the market before the end of this year, according to earlier statements by eXtra CEO Mohamed Galal. It remains unclear how much eXtra hopes to raise from the listing.

Use of proceeds: A portion of the IPO’s proceeds would be channeled towards “repaying a part of eXtra’s debt estimated at SAR 190 mn,” Galal said.

A quick look at ownership: eXtra owns 99% of UIHC, which owns and operates the Tasheel brand as well as Procco Financial Services in Bahrain. eXtra Bahrain owns 1% of UIHC.

A snapshot of financial results: 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.

Where the company is heading: UIHC 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.

ADVISORS- Our friends at HSBC are quarterbacking the transaction. We expect news on other advisors when the company’s prospectus is out.

SAUDI IPO PIPELINE AT A GLANCE-

Other IPOs in the pipeline:

  • The Fourth Milling Company (MC4) and Arabian Mills Food Products have been cleared by the CMA for share sales on Tadawul;
  • Hotels and resorts operator Boudl has filed to go public;
  • Perfume maker Arabian Oud is said to have appointed bankers ahead of a share sale;
  • PIF-backed lender Riyad Bank is considering the listing of its investment banking arm Riyad Capital ;
  • Nupco — a unit of the PIF — has reportedly tapped Rothschild & Co as financial advisor for its potential Tadawul IPO;
  • Singapore’s Olam Group is mulling the IPO of its Olam Agri subsidiary on Tadawul;
  • Budget airline Flynas is reportedly looking to go public this year.
  • Aster DM Healthcare looks set to spin off its GCC assets and seek a dual listing on Tadawul and in the UAE;
  • Hypermarket operator Lulu is said to be eyeing a dual listing on Tadawul and ADX.

IN CONTEXT- The local exchange saw nine IPOs in 1Q 2024, including three on the main market and six on Nomu.

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