Saudi contractor MGC calls off up to $800 million IPO despite strong demand
- The offering is covered multiple times at the top of its price range of 12.5 riyals per share last week
DUBAI: Saudi Arabia’s Mutlaq Al-Ghowairi Contracting Company has decided not to proceed with a planned initial public offering in Riyadh, an adviser said on Tuesday, in a deal that could have raised up to around $800 million and been one of the first regional offerings since the start of the Iran war.
The offering had been covered multiple times at the top of its price range of 12.5 riyals ($3.33) per share last week. However, the company opted to withdraw after consultations with its advisers, according to a bourse filing by Al Rajhi Capital.
MGC “remains committed to its expansion and strategic plans”, will explore various expansion options, and will reconsider the IPO in the future, the filing reads.
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Founded in 1977, MGC specialises in large-scale water infrastructure, transport and selective urban development projects. The company reported a backlog of 10.6 billion riyals ($2.82 billion) as of the end of March.
Shareholders had planned to offer 240 million existing ordinary shares to investors, representing a 30% stake, and had appointed Al Rajhi Capital and Morgan Stanley as joint financial advisors for the offering.
The listing was set to rank among the largest in the region this year, at a time when Middle East equity capital markets have slowed after a post-pandemic rush of offerings driven by economic diversification programmes.
Proceeds from equity and equity-related issuance in the Middle East and North Africa totalled $427.9 million during the first quarter of this year, down 91% from the same period a year earlier and the slowest annual start in the region since 2011, according to LSEG data.
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