Biggest Saudi IPO since Aramco sees ACWA planning $1.2bn offer

A Saudi investor monitors share prices at the Saudi Stock Exchange, or Tadawul, in the capital Riyadh. The listing will value ACWA at up to $11bn.

ACWA Power International, one of Saudi Arabia’s main vehicles for building renewable energy projects, is set to raise up to 4.55bn riyals ($1.2bn) in what would be the biggest offering in Riyadh since Saudi Aramco’s listing. The Riyadh-based utility, half-owned by the kingdom’s sovereign wealth fund, has set the price range for its offering between 51 riyals and 56 riyals per share, according to a statement on Tuesday. The company is selling 81.2mn shares, or an 11.1% stake, to raise financing for its transformation into a low carbon energy producer. The listing will value ACWA at up to $11bn. * Bidding and book-building period for participating parties: September 15 to September 27 * A final price is expected to be set before the offering opens to retail investors * Subscription period for individual investors: September 29 to October 1 * Joint financial advisers are: JPMorgan, Citigroup, Riyadh Capital and Natixis The Saudi government sold 2% of Aramco in its 2019 IPO, raising almost $30bn. It’s still the largest first-time share sale on record. ACWA Power “aims to play a major role” in the transition to greener energy by producing renewable electricity and hydrogen, it said in a prospectus for investors. It will also focus on desalination in the Middle East, Asia and Africa. Since the Saudi wealth fund boosted its stake in ACWA to 50% in November, the government has agreed with the company that it will help develop 70% of renewable energy projects under Crown Prince Mohamed bin Salman’s Vision 2030 plan to diversify the economy from oil. The offering comes as Aramco and other national oil firms in the Middle East step up plans to raise billions of dollars from foreign investors, including through asset sales and IPOs. Riyadh has been the hottest market for share offerings in the Middle East over the past two years, with new sales oversubscribed mostly thanks to local retail and institutional investors. Tanmiah Food Co became the third company to list on the main market this year, following Theeb Rent A Car Co and AlKhorayef Water & Power Technologies Co. Last week, ACWA chief executive officer Paddy Padmanathan said in interview with Bloomberg TV that meetings with potential investors ahead of the IPO had gone “very well.” Over the next five years, the company will double the amount of power it generates, mostly from renewable sources, amid a global shift away from burning fossil fuels, he said.