Saudi wealth fund picks JPMorgan, Morgan Stanley for Nupco IPO
SAUDI Arabia’s sovereign wealth fund has picked banks for the planned initial public offering of the kingdom’s largest medical procurement firm, as it hunts for cash to finance the crown prince’s ambitious economic agenda.
JPMorgan Chase, Morgan Stanley and SNB Capital have been hired to work on Nupco’s IPO, according to people familiar with the matter. The deal could come as soon as this year, the people said on Monday (Jul 15), asking not to be identified as the information is not public.
The Public Investment Fund could raise close to US$1 billion by selling a 30 per cent stake in the firm, according to one of the people.
Bloomberg News has previously reported that the deal was likely to raise less than US$1 billion.
Representatives for the Public Investment Fund, JPMorgan, Morgan Stanley and SNB Capital declined to comment.
Saudi Arabia is considering cutting spending on some of its biggest development projects as it grapples with the scale of Crown Prince Mohammed Bin Salman’s Vision 2030 agenda, Bloomberg News reported last week.
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That will put additional pressure on the Public Investment Fund, which is the main entity tasked with driving the multi-trillion-US dollar economic diversification plan.
The US$925 billion wealth fund has listed several of its portfolio companies in recent years and is becoming an active debt issuer.
Saudi Arabia has been a busy market for share sales over the past few years, together with other Gulf countries, as governments sought to raise funds to reduce their reliance on the energy sector while encouraging private firms to list to develop their capital markets.
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Founded in 2009, Nupco seeks to raise the level of health services in the kingdom, improve the efficiency of government spending for the purchase of medical supplies and increase the effectiveness of supply chains in the public health-care sector, according to its website.
Health care is one of the main focus areas of Vision 2030 as the country seeks to develop its drug industry.
Dr Soliman Abdel Kader Fakeeh Hospital raised US$763 million in a Riyadh IPO in June, but its shares have risen just 2 per cent from their offer price.
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