Legal advisors, Abdulaziz Alajlan & Partners alongside Baker McKenzie, London, have acted for the underwriters on Arabian Drilling Company’s (“Arabian Drilling”) initial public offering at SAR 100 per share on the Saudi Stock Exchange (Tadawul) with an offer size of US$ 712 million (SAR 2.6 billion). The syndicate comprised HSBC Saudi Arabia, Goldman Sachs Saudi Arabia and SNB Capital Company as joint financial advisors, bookrunners and underwriters. The offering comprised the sale of 30% stake (26,700,000 shares) of the Saudi oilfield services provider and was marketed internationally under Regulation S, with trading in its shares commencing on 7 November 2022.
Founded in 1964, Arabian Drilling is a leading Saudi Arabian oil and gas drilling company offering onshore and offshore rigs drilling services. With a total fleet size of 45 rigs, Arabian Drilling is the number one player in the Kingdom with a market share of 17% in terms of total number of rigs, with an annual average of 275 wells drilled over the last three years.
The IPO was marketed to retail investors and buyers with an intention to use the net proceeds from the offering to further support the company’s growth plans. It consisted of a secondary offering of 19.89% of the company’s total share capital through the sale of 17,700,000 shares, and a primary offering of 10.11% through the issuance of new 9,000,000 shares. The final offer price per share was set at US$ 26.61 (SAR 100), which was at the top end of the price range announced in September 2022. The total proceeds raised by Arabian Drilling’s IPO were US$ 712 million (SAR 2.6 billion), with the book-building process having generated an order book of US% 43 billion (SAR 162 billion) and resulted in a subscription of coverage of around 61x of the total offered shares.
Leading on the transaction, George Marshall, Partner at Baker McKenzie stated: “We are very pleased to have been able to assist on this important transaction, which has provided Arabian Drilling Company with the funding to support its growth strategy. This matter also further demonstrates the depth and breadth of our cross-border capital markets teams across Riyadh and London, who worked diligently to ensure we successfully completed the deal.”
Karim Nassar and Abdulrahman Alajlan also remarked, “We are delighted to have had the opportunity to advise the underwriters on this landmark offering. The Saudi IPO market is still one of the most attractive markets in the Middle East as it has witnessed a number of successful IPOs in 2022 despite a fall back worldwide. Looking ahead and with investors and buyers becoming much more interested in public market transactions, we envision a continuation in domestic IPOs in the region as we move into 2023, particularly in Saudi Arabia and the UAE where we are already witnessing a robust pipeline of offerings.”
The cross-border team was led by George Marshall (Partner, Baker McKenzie, London) and Karim Nassar (Legal Advisors, Riyadh). Further support was provided by capital markets experts including Nadine Nassar, Lama Al Habib and Reema Al Salem of Legal Advisors, Riyadh and Charles Farnsworth (Of Counsel) of Baker McKenzie, London.
This deal adds to the long list of transactions on which Legal Advisors and Baker McKenzie have advised on in Saudi Arabia. The latest examples of international capital markets transactions include advising the syndicate of 11 underwriting banks on ACWA Power’s US$ 1.2 billion IPO and US$ 11 billion listing on Tadawul as well as advising the underwriters on Saudi Tadawul Group Holding’s US$ 1.0 billion initial public offering and $3.4 billion listing on Tadawul.
Founded in 1964, Arabian Drilling is a leading Saudi Arabian oil and gas drilling company offering onshore and offshore rigs drilling services. With a total fleet size of 45 rigs, Arabian Drilling is the number one player in the Kingdom with a market share of 17% in terms of total number of rigs, with an annual average of 275 wells drilled over the last three years.
The IPO was marketed to retail investors and buyers with an intention to use the net proceeds from the offering to further support the company’s growth plans. It consisted of a secondary offering of 19.89% of the company’s total share capital through the sale of 17,700,000 shares, and a primary offering of 10.11% through the issuance of new 9,000,000 shares. The final offer price per share was set at US$ 26.61 (SAR 100), which was at the top end of the price range announced in September 2022. The total proceeds raised by Arabian Drilling’s IPO were US$ 712 million (SAR 2.6 billion), with the book-building process having generated an order book of US% 43 billion (SAR 162 billion) and resulted in a subscription of coverage of around 61x of the total offered shares.
Leading on the transaction, George Marshall, Partner at Baker McKenzie stated: “We are very pleased to have been able to assist on this important transaction, which has provided Arabian Drilling Company with the funding to support its growth strategy. This matter also further demonstrates the depth and breadth of our cross-border capital markets teams across Riyadh and London, who worked diligently to ensure we successfully completed the deal.”
Karim Nassar and Abdulrahman Alajlan also remarked, “We are delighted to have had the opportunity to advise the underwriters on this landmark offering. The Saudi IPO market is still one of the most attractive markets in the Middle East as it has witnessed a number of successful IPOs in 2022 despite a fall back worldwide. Looking ahead and with investors and buyers becoming much more interested in public market transactions, we envision a continuation in domestic IPOs in the region as we move into 2023, particularly in Saudi Arabia and the UAE where we are already witnessing a robust pipeline of offerings.”
The cross-border team was led by George Marshall (Partner, Baker McKenzie, London) and Karim Nassar (Legal Advisors, Riyadh). Further support was provided by capital markets experts including Nadine Nassar, Lama Al Habib and Reema Al Salem of Legal Advisors, Riyadh and Charles Farnsworth (Of Counsel) of Baker McKenzie, London.
This deal adds to the long list of transactions on which Legal Advisors and Baker McKenzie have advised on in Saudi Arabia. The latest examples of international capital markets transactions include advising the syndicate of 11 underwriting banks on ACWA Power’s US$ 1.2 billion IPO and US$ 11 billion listing on Tadawul as well as advising the underwriters on Saudi Tadawul Group Holding’s US$ 1.0 billion initial public offering and $3.4 billion listing on Tadawul.
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