State-owned Saudi Arabian Mining Company (Maaden) yesterday launched an initial public offering to raise 9.25 billion riyals ($2.47bn) in the Middle East’s biggest mining IPO, valuing the firm at $4.9bn.
Maaden plans to sell 462.5 million of stock – equivalent to 50 per cent of its share capital – at 20 riyals each with subscriptions closing on July 14, according to the bourse regulator, the Capital Market Authority (CMA).
The IPO is to cover some of the costs of projects led by the company, mainly a 740,000-tonne aluminium smelter with Rio Tinto and a 3m tonnes phosphate and by-products plant with Saudi Basic Industries Corporation (Sabic).
The other 50pc of Maaden’s capital is held by the Public Investment Fund (PIF), a state fund under the helm of the finance ministry. Only Saudi investors will be able to buy the stock.
Maaden-Rio Tinto’s aluminium smelter will cost $7.53bn and plans to export 70pc of the production, Vice-President Abdallah Al Fallaj said earlier.
The Saudi firm has secured loans worth several billion dollars from Saudi and Korean institutions for the phosphate project with Sabic.
Maaden estimates its total investments at 60bn riyals, including phosphate, bauxite, gold and industrial minerals. The investments are part of government plans to diversify an economy that heavily depends on oil.
It said last year the bill for the phosphate venture had soared to 21bn riyals, 62pc more than it had initially expected, due to a rise in labour and material costs. The smelter’s initial cost was $7bn.