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Shareholders of electronics retailer eXtra have approved the sale via IPO of a 30% stake in the unit that owns and operates Tasheel Finance, according to a disclosure to Tadawul yesterday. Extra will sell 7.5 mn shares of United International Holding Co. (UIHC), its non-bank financial services arm, on Tadawul’s main market.
It’s not yet clear how much eXtra hopes to raise from the listing, but CEO Mohamed Galal told Al Arabiya yesterday the company would pull the trigger on the transaction by the end of the second quarter or of the fourth quarter of this year (watch, runtime: 9:50). “After receiving the necessary approvals [from relevant authorities], we will have six months [to finalize the listing],” he said.
Uh, Enterprise? Second or fourth? Yep — nobody in this part of the world goes to market with an IPO in the summer months. The equity-raising window runs January-May (or June) using FY or 1Q numbers and reopens in September.
Use of proceeds: A portion of the IPO’s proceeds would be channeled towards “repaying a part of eXtra’s debt estimated at SAR 190 mn,” Galal said.
A quick look at ownership: eXtra owns 99% of UIHC, which owns and operates the Tasheel brand, as well as Procco Financial Services in Bahrain. eXtra Bahrain owns 1% of UIHC.
UIHC has been doing well: The company turned in net income of SAR 156.8 mn for 9M 2023, up nearly 12% year on year — and good for a 41% net margin given that it posted revenues of SAR 383.2 mn in the same period.
And has big plans: UIHC says it wants to be the largest provider of shariah-compliant consumer finance in the Kingdom operating across multiple categories. It benefits from access to the 14 mn customers that pass through eXtra’s 48 stores across the country and is broadening the base of companies that it works with.
ADVISORS- Our friends at HSBC are quarterbacking the transaction. Look for news of the other advisors when the company’s prospectus drops./
A SOLID IPO PIPELINE-
We have a solid IPO pipeline for Tadawul’s main market taking shape for the remainder of the year:
- PIF-backed lender Riyad Bank is considering the listing of its investment banking arm Riyad Capital;
- Hotels and resorts operator Boudl has filed to go public;
- Labor agency Smasco is in the chute;
- Water treatment company Miahona has gotten approval for an offering of 30% of its shares;
- Dr Soliman Abdul Kader Fakeeh Hospital (DSFH) has gotten regulatory approval to go public;
- Fourth Milling Company will list before the end of June;
- Singapore’s Olam Group is mulling the IPO of its Olam Agri subsidiary on Tadawul;
- Hypermarket operator Lulu is said to be eyeing a dual listing on Tadawul and ADX;
- Aster DM Healthcare looks set to spin-off its GCC assets and seek a dual listing on Tadawul and in the UAE.
And it’s shaping up to be a good run for Nomu: The parallel market’s pipeline this year includes Riyadh-based advisor Yaqeen Capital (itself a top advisor on Nomu IPOs), medical supplies outfit Qomel, Riyadh-based construction and mining firm Mohammed Hadi Al-Rasheed, Leaf Global Environmental Services, petroleum derivatives manufacturer Petrol Naas and Arabian United Float Glass. Nomu-listed Gas Arabian Services (GAS) also plans to debut an additional 10% stake on the market in a secondary share sale to meet the requirements to transition to Tadawul’s main market.
