Saudi CMA approves registration and IPO of Aramco’s Luberef shares

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RIYADH: Saudi Arabia’s Capital Market Authority has approved the registration and initial public offering of 50 million shares of Saudi Aramco Base Oil Co.’s Luberef refinery unit, accounting for 29.6 percent of the firm’s share capital, according to a statement.

The firm’s prospectus is expected to be published sometime within the near future before the beginning of the subscription period. It will include highly relevant information such as the company’s financial statements along with its activities and management. Such information is meant to aid potential investors prior to making an investment decision.

Investors are highly urged to carefully go through the prospectus which involves detailed information on the firm as well as offering and risk factors before deciding to subscribe.

This will help potential investors evaluate the feasibility of investing in the offering and therefore curb high risk.

The CMA’s approval of the application will be valid for 6 months during which the company’s offering and listing should be completed otherwise the approval on the application will be cancelled.

While the CMA’s approval does not mean that it is recommending subscription to the offering, it just reflects that the company has met the legal requirements under the Capital Market Law and its implementing regulations.

Earlier this year, Saudi Aramco’s Luberef refinery unit announced plans of an IPO aimed at raising over $1 billion, Bloomberg reported quoting people familiar with the matter.  

According to the report, Aramco has appointed the local unit of HSBC Holdings Plc and SNB Capital to advise on the offering.  

The sources, who wished to stay anonymous, also noted that the company’s current plan is to sell a 30 percent stake owned by Jadwa Investment.  

It was in 2007 that Jadwa acquired the stake in Luberef from Exxon Mobil Corp.  

With the new move, Luberef will join the long list of several Aramco subsidiaries that are already listed on the Saudi stock exchange.

These include Saudi Basic Industries Corp., and Rabigh Refining & Petrochemical Co.

In addition to this, last month, Luberef announced that it intends to launch a new specialty production facility in Yanbu that will manufacture transformer oil and white oil used in power generation, pharmaceutical and food businesses.  

Called Lube Hub, the facility will enable the localization of these specialty products in the Kingdom. The venture will attract producers and operators of base oil-related products.  

“We are trying to attract investment from companies to start some of the specialized products that are not being produced in Saudi Arabia, including transformer oil and white oil,” Tareq Al-Nuaim, president and CEO of Luberef, told Arab News.

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