The Business Times

Saudi oil driller hires Goldman, HSBC, SNB Capital for IPO

Published Sun, Sep 18, 2022 · 05:44 PM

Arabian Drilling, a Saudi oilfield-services firm partly held by Schlumberger, hired Goldman Sachs Group, HSBC and SNB Capital to manage its initial public offering (IPO) in Riyadh, seeking to join a steady stream of Gulf firms tapping equity markets. 

The firm will sell 26.7 million shares, or a 30 per cent stake, in IPO, according to a statement. The offer price will be determined following a book-building period from Sep 28 to Oct 5.

About a third of the IPO will be new shares, and the proceeds will be used to scale up onshore and offshore fleet and expand operations in the Gulf Cooperation Council region, it said. Arabian Drilling operates 45 rigs and had revenue of US$586 million last year. It also has an order backlog of US$2.2 billion.

“We are in a period of unprecedented growth for Arabian Drilling – oil prices are up, demand for energy is high and we are growing,” chief executive officer Ghassan Mirdad said in an interview. “We have a clear strategy for growth, in Saudi or outside, and this needs a lot of funding.”

Investor appetite for Saudi listings remains strong, though a rally in Middle Eastern equities has faded over the past few months as fears of recessions gripped global markets. Saudi Arabia is home the Middle East’s biggest stock market and saw 10 IPOs in the past 12 months, raising a combined US$6.55 billion, data compiled by Bloomberg showed. 

Arabian Drilling could be valued at more than US$1.4 billion, people familiar told Bloomberg in April. The company was founded in 1964 and counts Saudi Aramco, the kingdom’s state energy producer, among its main customers.

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The company is looking to capitalise on Aramco’s plans to significantly boost its oil and gas production, while also expanding its operations in the Middle East and eyeing potential acquisitions, Mirdad said.

Saudi Arabia’s Industrialization & Energy Services, a firm which is majority controlled by Saudi wealth fund the Public Investment Fund, owns 51 per cent of Arabian Drilling. Services Petroliers Schlumberger owns the rest. BLOOMBERG

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