JEDDAH, 20 February 2006 — Huta Group, one of large contractors in the Kingdom, has planned to go public. The two arms of Huta Group, Huta-Hegerfeld Saudia Ltd. and Huta Marine Works Ltd., appointed yesterday the Saudi Hollandi Bank (SHB) as the financial adviser and manager of the group’s initial public offering (IPO).
The IPO is expected to get under way in the last quarter of 2006 contingent upon the approval of the Saudi Capital Market Authority (CMA) and the Ministry of Commerce and Industry.
Huta’s chairman, Saleh Binladin and the group’s managing director, Michael Wuebbens, signed the IPO agreement at the Jeddah Hilton with Abdulelah Al-Shaikh, SHB’s corporate banking group general manager, and Tahir Al-Dabbagh, the bank’s Western region general manager.
Binladin said that Huta’s management considered going public two years ago, but he refused to declare the percentage of the company’s capital that is to be floated in this IPO. He added, “The percentage is subject to the approval of CMA and the Ministry of Commerce and Industry, and before we get the approval, it is difficult to determine what would by the share of the floated capital.”
Binladin emphasized that Huta is a multinational company that is independent from the Binladin Group. He mentioned that Binladin Group does not have any stake in Huta Group, and that the management of the two groups is completely separate. “I happen to be the chairman of Huta just because I personally hold the majority of Huta’ shares, but not because Binladin Group owns some shares in it,” added Binladin.
SHB, which just got the approval of the CMA yesterday to raise its capital from SR1.26 billion to SR2.2 billion, has planned to sign similar IPO agreements with 15 national companies this year. According to Al-Shaikh, SHB has strong ties with many Saudi companies and it is attracting several of them to float their shares. Huta’s selection of SHB for the purpose of going public reflects the trust Saudi companies have toward our bank, added Al-Shaikh. Al-Dabbagh mentioned that the relationship between Huta and SHB has exceeded a period of 10 years, and he called Huta’s decision “a move that has been well thought of especially in this time when the market conditions are suitable and flourishing with excess liquidity.
Huta companies have been operating in the Kingdom for 40 years and employing more than 3000 employees. The group has an annual turnover of approximately SR500 million. The group has completed a wide range of large-scale construction projects such as seaports, oil terminals and utility and road projects.
