EFG Hermes completes listing of Saudi’s RCGC’s $378mln IPO

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EFG Hermes, a leading investment bank franchise, has concluded advisory on the SR1.4 billion ($378 million) IPO of Saudi power cables manufacturer Riyadh Cables Group Company (RCGC) on the Saudi Exchange. This is yet another landmark deal in the kingdom that marks the 10th IPO the EFG has advised on during 2022. EFG Hermes also acted as joint bookrunner on the transaction.

The listing saw RCGC offer 33,000,000 ordinary shares, representing 22% of its share capital, at a price of SR43.00/share, implying a total market capitalisation of SR6.45 billion. The transaction garnered significant traction from regional and global investors, having been 72x oversubscribed on the institutional tranche. Trading on the company’s shares commenced today, with RCGC listed under the ticker 4142.

Unique transactions

Saud Altassan, CEO of EFG Hermes KSA, commented on the transaction: “As the Saudi equity market continues to ramp up, we’ve made it a priority to focus on bringing to market unique transactions that provide unmatched returns, a testament to our standing as a gateway through which regional and global investors can access quality issuances. 2022 has been a year of remarkable achievements for EFG Hermes, having capitalised on our unrivalled capabilities, deep-rooted industry know-how, and the rock-solid foundation of trust we’ve built with clients to advise on the region’s most notable transactions. We look forward to building on these milestones to grow our Saudi business in the year ahead.”

RCGC’s track record of over four decades, paired with its ironclad operational model and expansive geographical presence, have enabled the company to become an integral part of the energy and communications landscape.

Established in 1984, RCGC is the leading power cable manufacturer in Saudi Arabia and Mena, and one of the largest in the world, with a total production capacity of some 264,000 tonnes.

37 global markets

Boasting 15 production facilities across Saudi Arabia, UAE, and Iraq, and anchored by a team of renowned engineers and technicians, the company manufactures a wide range of premium cable and wire offerings, with a focus on the generation, transmission and distribution, oil and gas, transportation, industrial, and telecommunications sectors. Alongside its manufacturing capacities, the company exports its products to over 37 global markets spanning five continents.

Mohamed Abou Samra, Managing Director at the Investment Banking division, EFG Hermes, also commented on the deal: “We are thrilled to have worked on this landmark IPO and to be supporting a national industrial pioneer such as RCGC. The deal ideally positions the company to carry out its expansion and scaling plans, which are becoming important now more than ever as the company gears up to support Saudi Arabia’s 2030 Vision directives in energy transition and developmental projects.

“As the kingdom continues to enjoy strong macroeconomic tailwinds that have attracted foreign capital and allowed the market to buck the global downturn in ECM activity, RCGC’s IPO was met with strong investor interest from both retail and institutional investors looking to capitalise on the company’s consistent profitability and growth prospects.”

Landmark IPOs

RCGC’s listing comes on the heels of several landmark IPOs the Investment Banking division led on the Saudi Exchange since 2020, having most recently advised on Americana’s landmark $1.8 billion dual listing on the ADX and the Saudi Exchange — the first IPO to take place between both exchanges simultaneously.

It served as joint bookrunner on the $144 million IPO of Saudi Arabia’s water desalination company Alkhorayef Water and Power Technologies, the $138 million IPO of the Saudi-based car rental company Theeb Rent a Car, Acwa Power’s 1.2 billion listing, and the $700 million offering of Dr Sulaiman Al Habib Medical Group.

With this transaction, the Firm has advised on 10 IPOs in nine different industries across six exchanges worth $2.8 billion — an unprecedented feat for any investment bank in the region. Earlier this month, the division advised on the $204 million IPO of Dubai-based education platform Taaleem — the first private sector IPO on the DFM since 2014.

Earlier in the year, it completed the $1.0 billion listing of Dubai’s exclusive toll-gate operator Salik on the DFM, the $2.0 billion listing of polyolefin manufacturer Borouge on the ADX, the $323 million IPO of Ali Alghanim and Sons Automotive Company on Boursa Kuwait, in addition to serving as advisor and joint bookrunner on the $6.1 billion listing of Dubai-based utility player Dewa.