KAMCO launches pre-listing private placement offering of 15 million shares in combined group company

Combined Group Company (CGC), has operated for 40 years and is also active in a number of overseas markets. CGC carries out a wide variety of projects, including construction of roads and sewers, infrastructure, bridges, expressways, buildings, housing projects, and oil pipelines and oil projects.

In addition, the company is engaged in the construction and maintenance of sanitary treatment plants, petrochemical industry projects, mechanical works and industrial plants. The company is also active in Build-Operate-Transfer (BOT) projects and is ISO 9001 certified. As of May 31st, 2005 CGC had more than KD 144 million worth of awarded projects in hand.

In the year ended March 31st, 2005 CGC recorded audited revenues of almost KD 70 million (2004: KD 60 Million) and net profit of KD 5.9 Million (2004: KD 7.8 Million). The company is currently undertaking legal transformation to a Kuwaiti Closed Shareholding Company with a share capital of KD 6 Million, based on which the company's earnings per share (EPS) was 98 fils/share in the year to March 31st, 2005.

The company's shares are being offered at a total offer price of 755 fils/share (including 5 per cent subscription fee). At this price, CGC's shares are priced at a price/earnings (P/E) ratio of 7.7 times; the current P/E ratio of the Kuwait stock market as a whole is around 14.6 times.

In addition, CGC paid a cash dividend of KD 2.5 Million or 41.7 fils/share for the year to March 31st, 2005, equivalent to 42 per cent of the proposed new share capital, and 43 per cent of net profit. The company's dividend represents a Dividend Yield of 5.5 per cent per annum on the private placement offer price.

In addition, based on its audited financial statements for the year ended March 31st, 2005, the company has been certified by Beit Al Mashoura, as being in compliance with general accepted principles of Islamic Shariah.

The private placement offering is scheduled to close on July 24th, 2005 and will be by invitation only to selected investors. It is anticipated that CGC will be in a position to list on the Kuwait Stock Exchange before the end of 2005, subject to fulfillment of listing conditions.

CGC chairman Sulaiman Al Hamad and partner & general manager Abdul Rahman Al Ma'arouf commented: "Combined Group Company has, through the dedication of its management and staff, become a major force in the booming construction sector in Kuwait and the region. In this, the company's 40th anniversary year, we are pleased to be able to broaden the company's shareholder base by offering new investors the opportunity to participate in CGC's ongoing success."

KAMCO chairman Masaud M.J. Hayat said: "KAMCO is delighted to represent Combined Group Company and we firmly believe that this pre-listing private placement offering of shares will be of interest to investors, due to the company's excellent operational and financial track record and the attractive and growing sector in which it operates. We also believe that CGC will be a valuable addition to the Kuwait Stock Exchange, offering investors access to this important industry sector."

The actual terms and conditions of the private placement are contained within the Private Placement Memorandum being issued by KAMCO. KAMCO is one of Kuwait's premier investment companies with extensive experience of corporate finance, having arranged the successful private placement and listing of five companies on the Kuwait Stock Exchange in the last two years.