'Emaar the Economic City' unveils prospectus for SR 2.55 billion IPO

The IPO of 255 million shares at a nominal value of SR10 (US$2.66) each aims to raise 30 per cent of EEC's total share capital of SR8,500 million (US$2.27 billion). Approved by the Capital Market Authority (CMA) of Saudi Arabia, the IPO will be only for ten days from July 22 to August 2, 2006.

According to the prospectus, the net proceeds from the offering will be used by EEC to finance its real estate development operations and to pay land dues. The IPO is fully underwritten with Saudi British Bank (SABB) acting as lead underwriters and Riyad Bank and The National Commercial Bank acting as sub-underwriters. HSBC are also the exclusive financial advisors on the IPO with SABB appointed as lead manager. KPMG Al Fozan & Bannaga are the registered auditors and reporting accountants while Baker & McKenzie are the legal advisors.

Approved by the Ministry of Commerce & Industry vide Ministerial Resolution No. 609 dated May 13, 2006, for its incorporation, EEC is developing the single largest private sector initiative in Saudi Arabia - the SR100 billion (US$26.6 billion) King Abdullah Economic City (KAEC). The Saudi Arabian General Investment Authority (SAGIA), the body responsible for inward investments to the Kingdom, is the prime facilitator of KAEC.

"A six-zone development, KAEC ushers in a new era of prosperity to the Kingdom," said EEC Chairman Mr Mohamed Ali Alabbar. "By integrating a world-class seaport, industrial district, financial island, educational zone, resorts and residential areas, KAEC perfectly complements the Kingdom's on-going growth thrust. These components are all key economic sectors that will catalyse foreign investment inflow and boost commerce and industry."

The site for KAEC is located in a 'Greenfield' site of 55 million sq m on the coast of the Red Sea to the north of Jeddah. According to initial forecasts, KAEC has the potential to generate some 500,000 jobs.

"KAEC will be a world class location to work and live, and a shining example for Saudi Arabia's transformation into a global economic powerhouse. It will further consolidate the Kingdom's position as the Middle East's largest economy," said Mr Alabbar.

Completion of the overall project will be done in stages with the first batch of businesses and residents expected to be moving into the City in a period of 30 to 36 months.