PIF-backed Ades receives $76.5bn in orders from institutional investors

The final offer price was set at the top end of the range at 13.5 riyals per share, implying a market capitalisation of $4 billion at listing

The Saudi Stock Exchange in Riyadh. Ades is selling 338.7 million shares through the IPO. Reuters

Ades Holding, an oil and gas drilling company backed by Saudi Arabia's Public Investment Fund, received orders of approximately 286.85 billion Saudi riyals ($76.5 billion) from institutional investors for its initial public offering.

The IPO, which seeks to raise 4.57 billion riyals, drew strong demand from institutional investors and was more than 62.7 times oversubscribed, the company said on Wednesday.

The final offer price was set at the top end of the range at 13.5 riyals per share, implying a market capitalisation of 15.24 billion ($4 billion) at listing.

Ades is selling 338.7 million shares, representing 30 per cent of the company’s issued share capital through the sale of a mix of 101.6 million existing shares (held by PIF, Ades Investments and Zamil Group Investment) and 237.1 million newly issued shares.

The sale shares represent 9 per cent and the new shares represent 21 per cent of the company’s issued share capital upon completion of the offering, Ades said in a statement.

The retail subscription will last for three days, from September 26-28.

A maximum of 33.8 million ordinary shares, representing 10 per cent of the total, will be allocated to individual subscribers.

The offered shares will be listed and traded on the Tadawul stock exchange following the completion of the IPO and listing formalities with the Capital Market Authority and the Saudi Exchange, the company said.

Ades' portfolio of services primarily includes onshore and offshore contract drilling and workover services, including maintenance, repair and enhancement of oil production.

It has operations across seven countries: Saudi Arabia, Kuwait, Qatar, Egypt, Algeria, Tunisia and India.

Operations in India will start this year on the back of already awarded contracts.

The company's key customers include Saudi Aramco – the world’s largest oil exporting company, the Kuwait Oil Company and the Qatar-based North Oil Company, which together represent more than 95 per cent of Ades' backlog as of December 31, 2022.

The company, which has a fleet of 85 rigs, said total revenue from contracts stood at 1.98 billion riyals in the first half of 2023.

The proceeds from the IPO will be distributed to Ades’ shareholders based on their shareholding in the sale shares, with the remaining proceeds used to reduce part of the group’s outstanding debt and finance its growth, the company has previously said.

EFG Hermes, Goldman Sachs, JP Morgan and SNB Capital are financial advisers and global co-ordinators for the IPO.