Saudi wealth fund weighs IPO of $5 billion driller

(Bloomberg) — Saudi Arabia’s wealth fund is considering an initial public offering of oil and gas driller ADES International Holding by the first half of next year, as it accelerates efforts to raise billions of dollars for new investments, people familiar with the matter said.

The Public Investment Fund is looking to hire investment banks for a potential listing and is expected to make a decision as soon as this year, the people said, asking not to be identified as the matter is private. An IPO could value the business, whose clients include Saudi Arabian Oil Co. and Kuwait Oil Co., at about $5 billion, some of the people said.

The listing on the local bourse in Riyadh could raise more than $1 billion, one of the people said. Deliberations are in the early stages and no final decisions have been made.

Representatives for PIF and ADES declined to comment.

PIF teamed up with the major owners of ADES to take the business private last year, in a deal valuing the company at about $516 million. ADES, which provides oil-and-gas drilling and production services in the Middle East and North Africa, has since grown through acquisitions.

The company bought seven jack-up rigs last month from Seadrill Ltd. for about $628 million in cash. In all, ADES has 84 onshore and offshore rigs across markets including Saudi Arabia, Kuwait, Qatar, Egypt, Algeria, and Tunisia, it said at the time.

Stake Sales

The PIF is seeking new capital for its ambitious investment plans. As part of these efforts, it’s considering paring down stakes in some of the kingdom’s biggest companies and listing more state-owned assets, Bloomberg News reported in October.

The fund has investments in companies across a range of industries from Saudi Electricity and utility Acwa Power to bourse operator Saudi Tadawul Group Holding. Last week, PIF said it was sellingan additional 10% stake in the kingdom’s stock exchange operator.

A potential listing of ADES follows the $710 million IPO this month of Arabian Drilling Co., a Saudi oilfield-services firm partly held by Schlumberger NV. The firm attracted $43 billion in institutional orders and its shares surged as much as 23% on debut, giving the company a market value of about $3 billion.

That’s part of a broader trend in the Middle East, which has bucked a global downturn in IPO activities on the back of high oil prices and strong investor demand. IPOs in the region have fetched $18 billion this year, just under half of the listing proceeds from across Europe, the Middle East and Africa.

Source: Worldoil



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