Cherry Trading is floating 30% stake on Tadawul

Cherry Trading is taking a 30% stake (9 mn shares) to the Tadawul main market, it said in a prospectus (pdf). The car rental company lined up the Capital Market Authority’s approval for the move in June.

The details: The entirety of shares will be offered to institutional investors, each able to book between 100k and 1.5 mn shares from Sunday, 26 October to Thursday, 30 October. Some 20% of the shares on offer will be open to retail investors between 12-13 November, provided there is sufficient demand. Retail investors will be able to apply for up to 250k shares each, with a minimum of 10 shares. Final allocations will be made on Wednesday, 19 November.

Post-IPO structure: Saudi Edarah Holding — Cherry’s largest shareholder — will sell down its 98.5% stake to 68.95%, with the remaining shares subject to a 6-month lock-up period beginning on the first day of trading. Meanwhile, the 1.5% stake held by Cherry CEO Abdulaziz Saleh Mohammed Al Sowail will be reduced to 1.05%.

Use of proceeds: Proceeds from the offering, excluding SAR 27 mn for IPO-related expenses, will be paid entirely to the selling shareholders. Cherry will not receive any funds from the offering.

Earnings snapshot: Cherry Trading logged a net income of SAR 63.1 mn in 2024, up 10.8% y-o-y. Revenue was up 5.3% to SAR 454.7 mn during the same period.

About Cherry Trading: Established in 1980, Cherry Trading operates through three main segments. The first is long-term leasing, which manages vehicle fleets for corporate and government clients under fixed contracts. The second is short-term rental, offering daily to monthly rentals through physical and digital channels. Finally, the vehicle sales segment sells used vehicles from the company’s own fleet.

ADVISORS- Our friends at EFG Hermes KSA, along with BSF Capital, are quarterbacking the transaction as the financial advisors, bookrunners, and underwriters. Other advisors include Stat Law Firm, Zeyad Sameer Khoshaim Law Firm, PwC, Euromonitor International, and KPMG.

Receiving agents include Alinma Investment, Al Rajhi Capital, SNB Capital, Riyad Capital, Al Bilad Investment, Al Jazira Capital, Alistithmar Capital, Derayah Financial, ANB Capital, Yaqeen Capital, Al Khabeer Capital, Sab Invest, Saham Capital, GIB Capital, Musharaka Capital, and Awaed Alosool Capital.