Saudi Aramco Base Oil Company, better known Luberef, is set to raise more
than 4.95 billion riyals ($1.32 billion) from its initial public offering after
choosing the higher range of its offer share price.
The refining unit of oil company Saudi Aramco sold more than 50 million
shares, or about 29.7 per cent of the company’s issued share capital, with the
IPO drawing strong demand from investors in the kingdom and
The institutional portion of the offering was 29.5 times oversubscribed,
generating institutional order book of around 146.4 billion riyals, the
company said in a statement on Sunday.
Luberef set the final share price at the higher end of the offering range at 99
riyals a share, implying a market capitalisation of 16.71 billion riyals at
listing, it said.
“We are delighted that Luberef’s offering has been met with substantial
interest from both local and international institutional investors,” Tareq
Alnuaim, president and chief executive of Luberef, said. “It is a testament to
the investors’ confidence in our company, our growth strategy and the
prospects for our industry.”
The subscription period for individual investors is set to open for five days,
from December 14 until December 18. A maximum of 12.5 million shares, or
quarter of the total share offering, will be allocated to individual investors.
Luberef is selling existing shares owned by private equity company Jadwa
Investment. It will list on the main market of Saudi Arabia’s Tadawul stock
Saudi Aramco owns 70 per cent of Luberef and Jadwa owns the remaining 30
per cent, which it acquired in 2007 from Exxon Mobil.
Aramco will not sell any of its shares in the offering and will continue to own
70 per cent of Luberef’s share capital after the offering. No date has been set
yet for shares to begin trading on the Tadawul exchange.
Luberef’s IPO plans come amid a bumper year for company listings in the
Gulf and Mena regions, despite declines in global markets, with Saudi Arabia
and the UAE making up the majority of new listings amid high oil prices.
Middle East IPOs have raised more than $19 billion this year, the highest
share for the Gulf region after 2019, when Saudi Aramco went public in a $29
billion offering, the world’s largest.
Last month, Americana, the largest quick-service restaurant operator in the
Mena region, raised $1.8 billion from its IPO, paving the way for its listing on
the Tadawul bourse and the Abu Dhabi Securities Exchange, the Arab world’s
two largest stock markets.
Americana is Saudi Arabia’s largest IPO this year and the first company to be
dually listed in the kingdom and the UAE.
Luberef is Saudi Arabia’s third largest IPO this year after Americana
and Nahdi Medical, the kingdom’s biggest pharmacy chain, which raised
$1.36 billion.
Established in 1976, Luberef currently operates two production plants on the
west coast of the kingdom, in Yanbu and Jeddah, with a combined annual
production capacity of 1.3 million metric tonnes of base oils, according to its
The Aramco unit makes base oils used in lubricants for motor vehicles, ships
and industrial machinery.
Base oils are used across various sectors where hydraulic, turbine and
transmission fluids are required in production and manufacturing machinery,
such as in the steel industry, food production, textiles and clothing.
Luberef’s products are sold mainly in the company’s key end markets,
including Saudi Arabia and other countries across the Mena region, Asia, the
Americas and Europe, it said.
SNB Capital, HSBC, Citigroup and Morgan Stanley are acting as joint
financial advisers, bookrunners, global co-ordinators and underwriters. In
addition, SNB Capital is also acting as lead manager on the IPO.