Riyadh: Emaar Economic City, a joint venture of the UAE's Emaar Properties and Saudi investors, will launch an initial public offering this month to raise 2.55 billion riyals ($680 million), sources close to the deal said yesterday.
"It will take place by the end of this month," one source said. A second source confirmed the timing, saying: "We are ready to go."
The sources said Emaar Economic City would offer a 30 per cent stake. The joint venture will lead the development of the giant King Abdullah Economic City on the Red Sea coast, which is estimated to cost 100 billion riyals.
Sources had told Reuters in February that the IPO was scheduled for March, but a subsequent crash on the Riyadh bourse, the Arab world's largest, got in the way.
Earlier yesterday, the trade ministry said it had approved the flotation, Saudi Arabia's biggest this year, but did not say when it would take place.
It said the company would offer 255 million shares to the public. HSBC is lead managing the IPO.
Emaar Economic City's capital is worth 8.5 billion riyals, with the remaining 70 per cent being raised by Emaar and its Saudi partners.
The project is Saudi Arabia's single biggest private investment and will include resorts, a huge international port and industrial and finance centres.
It is the latest multibillion dollar development in the booming Gulf Arab region, where some governments are using record oil revenues to diversify their economies with ambitious tourism and industrial projects.
Saudi Arabia, the world's largest oil exporter, is a key growth market for Emaar, developer of several mega projects in the Gulf tourism hub of Dubai.
Emaar, which owns about half the Saudi venture, is facing a property market downturn in the UAE. Its shares have taken a beating in recent months amid the crash and also on concern over its earnings.
The consortium includes the Saudi Assir Group, Bin Laden Group and Savola Group.
The 55-square-kilometre site, north of Saudi tourist and commercial centre Jeddah, is due to be completed in two to three years.
