Arabian Drilling says it will proceed with an initial public offering of 30% of its shares, with plans to list on the Saudi Exchange’s main market.
The IPO will include 19.89% of existing share capital, and 9 million new shares, which will amount to 10.11% of capital at the time of the stock market launch.
The Saudi Arabia-based drilling contractor is a partnership between Saudi Arabia’s Industrialisation & Energy Services Company (TAQA) and a subsidiary of Schlumberger.
TAQA is backed by the Saudi government-owned Public Investment fund (PIF) and owns 51% of Arabian Drilling, with Schlumberger holding 49%.
Arabian Drilling operates 45 onshore and offshore drilling rigs, focusing on clients in the Persian Gulf region and the partitioned zone between Saudi Arabia and Kuwait.
Other Middle-East-based drillers are scaling up their rig fleet, typically raising money through IPOs on the back of higher crude prices.
Abu Dhabi National Oil Company (Adnoc) last year raised more than $1.1 billion through an IPO of its Adnoc Drilling subsidiary, which was oversubscribed multiple times by local, regional and international investors.
The Arabian Drilling IPO will offer shares to individual and institutional investors, including institutional investors outside the US, the joint venture company said.
Approvals in place
Earlier this year, the Saudi Exchange approved the company’s request to offer 26.7 million shares, or 30% of its shares. Later the offering was also approved by the country’s Capital Market Authority.
A book-building event will take place from 28 September to 5 October, and the final offer price shall be determined after the process, the company note.
SNB Capital, Goldman Sachs Saudi Arabia and HSBC Saudi Arabia have been chosen as book-runners and underwriters, local media reports have suggested.
Arabian Drilling chairman Khalid Nouh described the planned IPO as “an opportunity to capitalise on positive market dynamics”.
Chief executive Ghassan Mirdad described the company is a “leading player in the kingdom’s drilling industry, with a fleet size of 45 onshore and offshore rigs”.
“We have a clear road map of how we are going to build scale and we plan to invest some of the proceeds into growing our fleet and footprint”, he said.
Arabian Drilling said it had a contract backlog of 8.2 billion Saudi riyals ($2.18 billion) as of 31 July 2022, adding further visibility on revenues.