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Flynas announces Tadawul IPO: Budget carrier Flynas Company is taking a 30% stake to Tadawul’s main market, according to a prospectus (pdf). The issuance will see a combination of issuing new shares and selling existing shares.
Where will the money go? Proceeds from 17.43 mn newly issued shares will go to the company for expanding its fleet and network. Meanwhile, proceeds from selling 33.83 mn existing shares will go to selling shareholders and partially fund the employee incentive program. Offering expenses, estimated at SAR 100 mn, will be deducted from the proceeds.
The details: Some 51.26 mn ordinary shares will be up for grabs in the offering open to institutional investors, with a 20% clawback good for some 10.5 mn shares for retail investors provided there is sufficient demand.
Books open soon: The airline is set to announce the price range by 12 May, in tandem with opening the orderbook for institutional investors which will run through 18 May. Retail investors subscriptions are set to open on 18 May, with final allocation planned for 3 June.
Post-IPO structure: Flynas’ three substantial shareholders — National Flight Services Company, Kingdom Holding Company, and Nasser Ibrahim Rashid Al Rashid — will retain majority ownership, holding a combined 62.84% stake post-offering, down from 84.91%. Shares of substantial shareholders will be subject to a six-month lock-up period from the first day of trading.
A snapshot of earnings: Flynas reported a net income of SAR 492.6 mn for the first nine months of 2024, while revenue reached SAR 5.9 bn. Dividend distributions are currently restricted under terms of a loan agreement with the Saudi Industrial Development Fund (SIDF) until the loan is repaid.
Flynas is set to be the first airline in the region to go public in almost two decades, and the third regional airline to ever go public after UAE’s Air Arabia and Kuwait’s Jazeera Airways IPOs in the 2000s. The company received approval from the Kingdom’s Capital Market Authority (CMA) inMarch to proceed with the IPO, having initially planned to make its market debut last year.
About Flynas: Established in 2010 and converted to a joint-stock company in 2017, the Riyadh-based company is the Kingdom's first budget carrier and the largest independent airline in the Kingdom by revenue and passengers. The company operates domestic and international routes with a fleet primarily consisting of Airbus A320neo aircraft. Flynas has significant fleet expansion plans, including firm orders for 195 narrow-body and 15 wide-body Airbus aircraft, according to the prospectus.
ADVISORS- Goldman Sachs Saudi Arabia, BSF Capital, and Morgan Stanley Saudi Arabia are joint financial advisors and underwriters. BSF Capital is also serving as lead manager. Bookrunners include Emirates NBD Capital KSA, Goldman Sachs Saudi Arabia, Al Rajhi Capital, BSF Capital, Citigroup Saudi Arabia, ANB capital, and Morgan Stanley Saudi Arabia. Receiving agents include BSF Capital, Al Rajhi Capital, SNB Capital, and Riyad Capital, among others.
