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Riyadh-based real estate developer First Avenue Real Estate Development is guiding on a price range of SAR 5.7-6.0 for its IPO on parallel market Nomu, according to a disclosure to Tadawul by the offering’s financial advisor and lead manager Al Khair Capital. The company is offering an 8.7% stake (equivalent to 16.4 mn shares), according to the offering’s prospectus (pdf).
Market cap + proceeds: At the top of the range, the transaction would give the company a market cap of up to SAR 1.1 bn at listing, and raise some SAR 98.5 mn in proceeds. Some SAR 3.5 mn in proceeds will go towards covering costs associated with the offering.
Use of proceeds: All net proceeds will go toward expansion projects — represented by two real estate investments at Jada Al Diriyah and Jada Al Mahamdiyah — with no funds allocated to shareholders or debt repayment. If proceeds are insufficient to finance the projects, the shortfall will be covered by available liquidity, real estate sales, or financing through banks. Meanwhile, any surplus proceeds will support the projects’ working capital.
Timeline + lock-up period: The subscription period will begin from today and wrap next Monday, 16 September, with allocation expected by Monday, 23 September. Investors can subscribe to a minimum of 100 shares and a maximum of 10.2 mn shares. Refunds will be processed within three business days of the allocation date. A 12-month lock-up period applies to major shareholders; after the lock-up ends, they can sell without prior approval.
Background: Makkah Construction and Development Co. (MCDC) signed a share purchaseagreement to acquire a 30% stake in First Avenue Real Estate Development for SAR 341 mn, late last month. The acquisition was to be financed through MCDC’s own resources and existing facilities, with the agreement outlining a commitment from First Avenue to fulfill the requirements and acquire necessary approvals for it to debut on Nomu.
ADVISORS- Al Khair Capital is acting as both financial advisor and subscription manager, while Khalijoon Law Firm is providing legal counsel. RSM United Accountants is auditing the company’s financials. Meanwhile Al Rajhi Capital, AlBilad Capital, Riyad Capital, SNB Capital, and other institutions are acting as receiving agents.
