Arab News, Saturday, Nov 26, 2022 | Jamadi Al Awwal 2, 1444
Saudi CMA approves registration and IPO of Aramco’s Luberef shares
Saudi Arabia:
Saudi Arabia’s Capital Market Authority has
approved the registration and initial public offering of 50 million shares of
Saudi Aramco Base Oil Co.’s Luberef refinery unit, accounting for 29.6 percent
of the firm’s share capital, according to a statement.
The firm’s prospectus is expected to be published
sometime within the near future before the beginning of the subscription period.
It will include highly relevant information such as the company’s financial
statements along with its activities and management. Such information is meant
to aid potential investors prior to making an investment decision.
Investors are highly urged to carefully go through
the prospectus which involves detailed information on the firm as well as
offering and risk factors before deciding to subscribe.
This will help potential investors evaluate the
feasibility of investing in the offering and therefore curb high risk.
The CMA’s approval of the application will be
valid for 6 months during which the company’s offering and listing should be
completed otherwise the approval on the application will be cancelled.
While the CMA’s approval does not mean that it is
recommending subscription to the offering, it just reflects that the company has
met the legal requirements under the Capital Market Law and its implementing
regulations.
Earlier this year, Saudi Aramco’s Luberef refinery
unit announced plans of an IPO aimed at raising over $1 billion, Bloomberg
reported quoting people familiar with the matter.
According to the report, Aramco has appointed the
local unit of HSBC Holdings Plc and SNB Capital to advise on the offering.
The sources, who wished to stay anonymous, also
noted that the company’s current plan is to sell a 30 percent stake owned by
Jadwa Investment.
It was in 2007 that Jadwa acquired the stake in
Luberef from Exxon Mobil Corp.
With the new move, Luberef will join the long list
of several Aramco subsidiaries that are already listed on the Saudi stock
exchange.
These include Saudi Basic Industries Corp., and
Rabigh Refining & Petrochemical Co.
In addition to this, last month, Luberef announced
that it intends to launch a new specialty production facility in Yanbu that will
manufacture transformer oil and white oil used in power generation,
pharmaceutical and food businesses.
Called Lube Hub, the facility will enable the
localization of these specialty products in the Kingdom. The venture will
attract producers and operators of base oil-related products.
“We are trying to attract investment from
companies to start some of the specialized products that are not being produced
in Saudi Arabia, including transformer oil and white oil,” Tareq Al-Nuaim,
president and CEO of Luberef, told Arab News.