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Saudi Aramco’s Lumi sets price range for IPO, eyes USD 290 million target

According to a statement released by Lumi, the price range was established between 62 and 66 riyals per share, which would give the firm a worth of up to 3.63 billion riyals

Lumi, one of the major auto rental companies in the Kingdom of Saudi Arabia, announced that it might raise to 1.089 billion riyals (USD 290 million) after a price range was determined for its initial public offering (IPO). Lumi is a subsidiary of Saudi Arabia’s national oil company, Saudi Aramco.

According to a statement released by Lumi, which is headquartered in Riyadh, the price range was established between 62 and 66 riyals per share, which would give the firm a worth of up to 3.63 billion riyals.

After a quiet summer, the Gulf initial public offering (IPO) market is expected to be put to the test by the share sale.

Seera is a Saudi travel firm that was originally known as Al Tayyar Travel Group. Lumi is an entirely owned subsidiary of Seera.

According to the prospectus for the auto rental company’s initial public offering, the company ranked itself as the third-biggest operator in the country in 2021, with a market share of approximately 7%, based on the size of its fleet.

In April 2023, anonymous sources told Reuters that Lumi had appointed Saudi Fransi Capital (1050. SE) as a financial advisor and book-runner as well as EFG Hermes as a book-runner to organize the sale of 30% of the company’s shares. (USD 1 is equivalent to 3.7510 riyals).

Meanwhile, the IPO of the Saudi drilling venture ADES, backed by the Kingdom’s Public Investment Fund (PIF), was oversubscribed within hours of announcing the price range.

ADES, which seeks to raise as much as 4.6 billion riyals (USD 1.2 billion). The IPO is set to be Saudi’s largest offering in 2023.

The range has been set at 12.5 riyals to 13.5 riyals a share, valuing the company at as much as 15.2 billion riyals, according to media reports. The oil and gas driller is selling 237.1 million new shares in the offering, while its shareholders, Public Investment Fund, ADES Investments Holding and Zamil Group Investment are reportedly selling about 101.6 million shares. The total stake being offered is 30% of the company.

The IPO got oversubscribed multiple times throughout the range and within hours of opening books, according to terms of the deal obtained by Bloomberg News.

The PIF teamed up with the major owners of then London-listed ADES to take the business private in 2021, in a deal valuing the company at about USD 516 million. ADES, whose services encompass the region of Middle East and North Africa (MENA), has grown tremendously in the last two years, as it currently has a fleet of 85 rigs and operations across seven countries, including India where three rigs will be operating in 2023, according to the ADES’ website.

The venture’s major clients include Saudi oil giant Aramco, Kuwait Oil Company and Qatar-based North Oil Company, which accounted for over 95% of ADES’ backlog as of the 2022 end.

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