Nayifat Finance Company announces intention to list on the Saudi Stock Exchange (Tadawul)

Nayifat Finance Company (“Nayifat” or “the Company”), one of Saudi Arabia’s leading non-bank financial institutions (“NBFI”), announces its intention to proceed with an initial public offering (the “IPO” or the “Offering”) on the Main Market of the Saudi Stock Exchange (“Tadawul”). The Offering will comprise 36,500,000 Ordinary New Shares, representing 30.041% of the total share capital of the Company after the Offering. The Capital Market Authority (“CMA”) issued its resolution on 31 March 2019, approving the application for the offering. The net proceeds due to the Company will be used to grow the company’s financing portfolio and add credit cards to its product range. Current shareholders will not receive any proceeds from the Offering.

Mr. Saud Huwaimel Farraj Al Dosari, Chairman of Nayifat Finance Company, commented:

“The announcement of our Intention to List on Tadawul is an important milestone for the Company, with the forthcoming IPO set to boost us on our growth trajectory. For some time, we have occupied a leading position in the Saudi NBFI industry, and this latest achievement is testament to the diligence and hard work that have been shown by management and staff since Nayifat’s foundation in 2002. With a track record of servicing more than 250,000 customers, and a current active loan book of more than 40,000 borrowers, the proceeds from our listing will be instrumental in enabling us to grow our footprint in the Kingdom.”

Mr. Abdulmohsen Al Sowailem, Chief Executive Officer at Nayifat Finance Company, said:

“We have identified opportunities for expansion, which will see our loan book grow considerably between now and 2023 in line with the National Transformation Plan and the Financial Sector Development Program which forms part of Saudi Vision 2030. Our IPO is an important step for setting those growth plans in motion, especially through the diversification of our product offering and expansion of our financing business. Our aim is to consolidate Nayifat’s place as Saudi Arabia’s premier NBFI, with key pillars of our expansion being consumer finance and our expansion in SME financing and credit card products. These initiatives require capital, of which we aim to raise a healthy portion through offering roughly 30% of our equity to the public. An increasingly stable economic environment and robust regulatory framework – both of which are highly supportive of the SME customer segment – will further enhance our growth objectives.”

OVERVIEW OF THE OFFERING

• Listing of Ordinary Shares on the Main Market of the Saudi Stock Exchange (Tadawul).

• The Offering comprises 36,500,000 New Ordinary shares (“Offer Shares”).

• Immediately following formal listing, Nayifat Finance Company is expected to have a free float of approximately 30.0% of its issued share capital.

• The IPO will comprise of 36,500,000 Offer Shares to parties entitled to participate in the book-building process (“Institutional Tranche”) in accordance with the CMA Instructions on Book-Building and Allocation of Shares in Initial Public Offerings. Following the completion of the Institutional Tranche, the Offer Shares will also be offered to individual investors in Saudi Arabia (“Retail Tranche”). Initially, 100% of the Offer Shares will be provisionally allocated to the Institutional Offering. This may be reduced to thirty-two million eight hundred and fifty thousand (32,850,000) Ordinary Shares, which represent ninety percent (90%) of the total Offer Shares depending on the level of demand by individual investors in the Kingdom. The final number of Offer Shares allocated to the Institutional Tranche will be accordingly adjusted based on subscriptions from individual investors in the Retail Tranche.

• The offer of Offer Shares in the Institutional Tranche will be made as follows:

• Within Saudi Arabia, including but not limited to Government entities and Government owned companies, public and private investment funds/companies, persons authorised by the CMA ("Authorised Persons") and certain institutional clients of Authorised Persons
• Qualified Foreign Investors (“QFIs”) will be permitted to trade in the Shares after their trading starts on the Exchange, in accordance with CMA Rules for Qualified Foreign Financial Institutions Investment in Listed Shares.

• Excess subscription monies, if any, will be refunded to the Subscribers without withholding any charge or commission by the Lead Manager or the Selling Agents. Announcement of the final allotment and refund of excess subscription monies, if any, will be made no later than July 23^rd

• The Substantial Shareholders will be subject to a restriction period during which they will be prohibited from selling their Shares for a period of six (6) months (the “Lock-up Period”) as of the date trading starts on the Saudi Stock Exchange. Shareholders of the Company who own 5% or more of its shares are: FALCOM Holding Company (71.68% prior to the Offering), Saud Huwaimel Farraj Al Dosari (7.58% prior to the Offering) and Abdulaziz Saud Omar Al Blehed (7.04% prior to the Offering).

• CMA and Tadawul approvals have been obtained for the Offering.

• The Company has appointed NCB Capital Company as Financial Advisor (the “Financial Advisor”), Sole Bookrunner and Underwriter (the “Underwriter”) and the Lead Manager (the “Lead Manager”), in relation to the Offer Shares. In addition, Falcom Financial Services has been appointed as Co-Financial Advisor (the “Co-Financial Advisor”).

• The Company has appointed AlDhabaan & Partners in association with Eversheds Sutherland (International) LLP as the legal advisor to the IPO and Offer Shares.

• Timetable

Start of Institutional Book Building: Monday, June 24, 2019

Close of the Institutional Book Building:* Tuesday, July 02, 2019

Price Announcement: Thursday, July 04, 2019

Provisional Allocation: Thursday, July 04, 2019

Receipt of Institutional Investors Application Forms: Sunday, July 07, 2019

Last Date for Institutional Investor Funding: Thursday, July 11, 2019

Final Allocations: Thursday, July 18, 2019

Expected trading commencement date for the Shares

The Shares trading commencement is expected to start after completion of all the relevant legal requirements and procedures. Announcement of the Shares trading commencement will be made through local newspapers and Tadawul’s website (www.tadawul.com.sa).

OVERVIEW OF NAYIFAT FINANCE COMPANY

• The Company, established in 2002 as a non-bank financial institution, provides Shari’a-compliant financing solutions for individuals and institutions, in accordance with the laws, rules and instructions issued by the Saudi Arabian Monetary Authority (“SAMA”) and Financial Companies Control Law.

• As a non-bank financial institution (“NBFI”), Nayifat is licensed by SAMA to engage in the following activities:
  • Consumer finance;
  • Small- and Medium-sized Enterprise (“SMEs”) finance;
  • Lease finance;
  • Credit card finance.

• The Company's main products are Shari’a compliant and are based on Tawarruq, Murabaha and Ijarah lending facilities. Nayifat believes that the continued growth of the Saudi economy along with the expansion of the banking sector will drive greater demand for Shari’a-compliant financing facilities.

• In 2018, the Company entered into a strategic alliance with Visa International to operate under a “Principal License” for Visa Credit Cards in Saudi Arabia and has also been licensed by SAMA for credit card financing. This will enable the Company to provide credit card finance products and services to customers.

• The strategic priorities of the Company are based on five (5) core pillars:

• Enable easy access to finance: using prompt and easy procedures for customers. The Company has established a robust network of branches throughout the Kingdom of Saudi Arabia, focusing on meeting customers' needs for immediate liquidity by ensuring the swift disbursement of finance through a simple and swift process of accreditation and disbursement.

• Expand penetration of financing market and customer segments: Nayifat will focus on individual and SME customer segments, driving business performance through increasing penetration and geographical reach. The Company seeks to be the preferred financing choice for individual customers and SMEs and plans to maximize profit growth by increasing market share in the non-bank financing sector.

• Maintain the quality of the credit portfolio: Nayifat focuses on maintaining the quality of its credit portfolio to ensure sustainable growth. The Company seeks to achieve growth in its portfolio without affecting the average quality and profitability of its financing instruments. The Company will not compromise on its strict automated credit processing standards for the purpose of increasing its customer base or growing its portfolio.

• Flexibility: Nayifat periodically reviews and updates its strategies to adapt to and be ahead of dynamic market conditions while maintaining strict Corporate Governance policies. For example, with the increased use of non-cash payments in the Kingdom, the Company has entered the credit card segment in 2019. Nayifat aims to anticipate changing conditions in the market to support profitability by hedging and renegotiating with its financers on a periodic basis, to reduce the impact of profit rate adjustments.

• Expansion strategy:
  
  
  • (i) Individual financing

Due to the number of employees in the public sector (about 1.8 million employees, including military personnel), the Company has scope for a higher market penetration among this demographic. Nayifat is planning to open most of its new branches in areas in which government employees in both civil and military sectors live.  Furthermore, the percentage of female employees in the public sector is expected to increase, as it is an objective of Saudi Vision 2030, which will lead to a wider increase of government employees.

• (ii) SME financing

Finance companies in Saudi Arabia have an opportunity to finance the SME sector. The market environment and active support of the government provide considerable opportunity for Nayifat to expand its financing activities to cover various SME sectors. Nayifat intends to take advantage of this opportunity by expanding its SME financing portfolio through regional branches. The Company aims to increase its SME penetration and support the government's efforts to develop the sector.

• (iii) Credit cards

Nayifat is expanding its product range to include credit cards. The Company aims to sell its credit card products to its existing customer base and to take advantage of its marketing platform to introduce customers to the product. The product introduction strategy will include: credit cards for customers who do not want immediate financing but prefer this option to cover emergency needs; credit cards as a financing product to customers who want quick short-term financing.

• (iv) Geographic expansion

Nayifat plans to expand its branch network. The Company operates twenty four (24) branches in thirteen (13) regions in the Kingdom, with the aim of expanding in remote areas, especially those with a sizeable population and limited available financing solutions. The Company selects the locations of new branches based on criteria including population size, density of government offices and military bases, and density of private sector offices. Management intends to open five (5) new branches by 2022

INVESTMENT HIGHLIGHTS

A range of factors have enabled the Company to grow rapidly and provided it with a solid platform for expansion. The most important competitive advantages of the Company include:

• Robust and profitable financial performance[1]

Nayifat Company is one of the major players in the NBFI market, with a l balance sheet net financing portfolio of SAR 1,455.4 million in financial year (“FY”) 2018; and total equity of SAR 947.7 million. Between FY 2015 and FY 2018, revenue has grown at a CAGR of 3.0%, with net income[2] growing at a CAGR of 11.2%, to reach SAR 172.4 million in FY 2018. Net income margins have improved from 42.5% in FY 2015[3] to reach 53.5% in FY 2018.

The Company optimizes its capital structure with a healthy mix of debt and equity. For FY 2018, the debt-to-equity ratio was 72% compared to FY 2017 when the debt-to-equity ratio was 106.8%. Nayifat maintained its leverage ratio (financing to equity ratio) of 1.6x in 2018, within SAMA’s maximum approved ratio for the Company of 3.5x, demonstrating scope for credit portfolio expansion, in line with the growth plans of the Company. Return on equity was 19.1% in FY 2018 (21.4% in FY 2017), In 2018, Nayifat’s Return on Equity and Profit Margins[4] were among the best performing in the NBFI sector[5] in KSA, with revenues the third highest in the sector. This is driven by strong operating performance and an optimal capital structure.

The company’s Non-Performing Loans (“NPL”) ratio was 5.2% in FY 2018 which is considered healthy when compared to NBFI industry average of 10.6 Unlike some players in the market, Nayifat has not securitized its receivables, which reflects positively on future cash flows.

• Attractive market dynamics

Saudi Arabia’s consumer finance market has seen continuous growth in the last decade. Consumer and SME credit is expanding, with consumer loans growing at a CAGR of 7% from 2007-2017[6], and SME financing growth supported by Vision 2030, which aims to boost SMEs’ contribution to GDP. Job creation, minimal taxes on basic goods, and social reforms supportive of a growing female workforce are expected to boost appetite for credit, creating a positive demand/supply dynamic for NBFCs. Finance companies extended around SAR 31 billion in total credit in 2016, a figure that grew to SAR 48 billion in 2018[7]. According to SAMA’s 2019 Financial Stability Report, total credit (on and off balance sheet) extended by finance companies accounted for just 3.2% of total banking credit in 2018 – indicating significant scope for growth.

Meanwhile, the credit card portfolio of finance companies is expected to expand at a CAGR of 19% from 2017-23, underpinned by improved penetration of 8.5% of credit card loans by 2023[8]. With the rising popularity of Islamic credit cards, strategic marketing plans, and minimal presence compared to banks, finance companies show significant growth potential in the segment. Among local finance companies, Nayifat is the only NBFI currently licensed by SAMA to issue Visa credit cards.

• Brand equity

Nayifat’s brand is well-penetrated throughout the Kingdom thanks to its 16-year track record as a NBFI. The Company has a leading position in providing comprehensive Islamic financing products and services. Nayifat has established a strong presence and reputation in the financial services sector, making it a benchmark for high-quality services provided by NBFIs.

• Strong distribution network

Nayifat is one of the largest NBFI players in Saudi Arabia in terms of branches and geographic coverage. The Company has a wide penetration with 24 branches, distributed over 13 regions. This presence enables it to meet the needs of diverse customers, including the private and public sectors. The Company's extensive network enables it to maintain and grow its business, spread risk, and serve and support customers throughout the country.

• High levels of compliance

Nayifat was one of the first companies to obtain a SAMA license to operate in the Kingdom and is a pioneer in the NBFI sector. The Company maintains the highest standards of performance, reconciliation, compliance, reporting and transparency. In 2014, SAMA announced full implementation of the Finance Companies Control Law, and upon the proactive efforts of management, the Company has already met the pre-licensing requirements that SAMA sets out. Nayifat has applied IFRS reporting standards since the beginning of 2014, before the official adoption of the accounting practice for unlisted companies in 2017. making it one of the first NBFIs in KSA to do so.

• Customer-centricity

Nayifat considers its customers to be the main reason for its sustained growth and continuity. Customer care and satisfaction are among the most important motives for policies and procedures that develop the business. To better serve customers, the period between loan application and loan disbursement has been reduced to two business days. The Company has recently differentiated itself by obtaining a license from SAMA to issue credit card finance products.

• High-quality financing portfolio

The Company has a rigorous credit assessment and risk management framework ensuring risk identification, control and management. The Company has organized and simplified the processes and systems designed to maintain the quality of its portfolio. In addition to assessment of the customer's solvency, Nayifat also assesses consumption behaviours and patterns prior to approval of financing.

Credit ratings

The Company performs an independent verification study of customers to assesses financial needs and analyses their ability to pay financing facilities, using advanced technical methods. For the purpose of rating potential customers, Nayifat adopts a dual score credit rating to identify rating results (based on the information provided in the applications and derived from Saudi Credit Bureau “SIMAH”). The Company depends on SIMAH credit reports for individuals and uses its own credit rating system from applications, based on the information provided by the applicant.

By adopting a dual credit scoring system, Nayifat can issue fast e-approvals without manual operations, allowing immediate processing with the highest level of evaluation and with minimal human interaction. The credit approval process is based on neutral and strictly designed criteria that does not allow any biased considerations, allowing Nayifat to reduce its credit risk and maintain the quality of its assets.

Collection mechanism

Nayifat has a multi-track collection mechanism. Periodic instalments due are received through various collection channels such as authorization, direct debit and existing payment instructions, with support of an experienced and highly qualified collection team equipped with automated communication systems. There are also arrangements with external collection advisors to deal with situations in which default payments exceed due dates. The collection teams are supported by internal and external legal teams, and the effectiveness of the process is reflected in Nayifat’s ability to maintain high levels of collection operations efficiency.

• Access to finance

Nayifat has built and sustained positive working relationships with banks and financing institutions. The Company has constructive relationships and credit facilities with almost all major banks in the Kingdom, providing steady financing flows at a reasonable cost and mitigating increased bank margins through hedging mechanisms. In addition, Nayifat is participating in a program with the Saudi Small and Medium Enterprises Authority (“Monsha’at”), to allow it to obtain financing facilities for SME customers at reduced rates, thereby enhancing profitability and maintaining its competitive position.

• Highly qualified management team

Nayifat has an executive management team with market-leading capabilities, extensive knowledge and long professional experience obtained during careers in the banking and finance sector. The Board of Directors and management believe that the deep experience of the senior team, as well as the Company’s strict risk management policies and procedures, will enable Nayifat to overcome future challenges and exploit opportunities.

BOARD OF DIRECTORS

The Company’s Board of Directors comprises individuals with diverse professional experience, as follows:

Non-Independent Members

• Saud Huwaimel Farraj Al Dosari – Chairman

In addition to his role as Nayifat’s Chairman, Mr. Al Dosari is Chairman of the Credit Committee and Chairman of the Executive Committee. He is also a Board Member of Gulf Integrated Industries Company. Mr. Al Dosari founded Nayifat in 2002 and was General Manager until 2010. Prior to establishing the Company, he was Deputy General Manager of Arab National Bank in charge of cards, loans, pension division, priority and upscale business, and non-branch distribution business. During his career he also held a range of positions at Samba Financial Group from 1980-1999, including as Credit Card General Manager; started and headed the Division of the Upscale Clients business and headed the Central Region Branches consumer business. Mr. Al Dosari holds a bachelor’s degree in Business Economics from Woodbury University (USA) and an MBA from University of La Verne (USA).

• Abdulaziz Saud Omar Al Blehed – Vice Chairman

In addition to his role as Nayifat’s Vice Chairman, Mr. Al Blehed is Chairman of the Nomination & Remuneration Committee. He is also a Board Member of Masarat Car Rental Company and Gulf Integrated Industries Company and has been CEO of Seder Group for Trading & Contracting LLC since 1981. Mr. Al Blehed possesses further professional experience earned during his term as Chairman of the Board of the Al Ahlia Cooperative Insurance Company, from 2010-2016. He holds a bachelor’s degree in Industrial Management from Oregon University (USA).

• Abdulmohsen Al Sowailem – Managing Director and CEO

Abdulmohsen took his role of Managing Director and CEO at Nayifat Finance Company in 2014, in addition to which he has been a Board Member since 2013 and a member of the Assets & Liabilities, Executive and Strategic Committees since 2015. He also sits on the Board of Directors of Falcom Holding Company, Falcom Financial Services, Gulf Integrated Industries Company, and LSC Warehousing & Logistics. 

Abdulmohsen’s previous professional experience includes as CEO of Logistics Services Company (2010-2014), and Board membership at the Saudi Ceramic Company (2010-2016), Filing & Packing Materials Company (2010-2016), and Arabian Pipes Company (2009-2012). From 2003-2005 he was Marketing & Strategy Business Development Manager at Al Rajhi Investment, having been Head of Marketing at Arab National Bank and First Line Manager at Saudi American Bank (now Samba Financial Group). Abdulmohsen holds a Bachelor of Business Administration degree from King Saud University, a Ministry of Trade & Investment License No. 130 (Financial Adviser), and a Ministry of Commerce & Investment License No. 245 (Administrative Consultant).

• Fahad Saleh Mohammad Al Musabhi – Board Member

Mr. Al Musabhi is a member of the Company’s Executive Committee, Nomination & Remuneration Committee and Credit Committee. He is also Chairman of the Board of the Masarat Car Rental Company and the Gulf Integrated Industries Company, while being Chairman at Board of GroupMed Insurance Brokers, the Saudi Mediterranean Investment Company and board member at Saudi Oger Telecommunications Company. Mr. Al Musabhi’s previous professional experience includes Senior Advisor to Saudi Oger, a construction company, and Board memberships at Filing & Packaging Materials Manufacturing Company and Amana Cooperative Insurance Company. He holds a bachelor’s degree in Accounting from King Saud University and is a member of the Saudi Organization for Certified Public Accountants (SOCPA).

• Bandar Mohammad Ahmed Al Baiz – Board Member

Mr. Al Baiz is a member of the Nomination & Remuneration Committee, Risk Committee and Executive Committee, while performing his current role as Head of Operations at Falcom Financial Services. His previous professional experience includes the position of Acting Head of Operations at Falcom Financial Services, prior to which he was Operations Supervisor. Before joining Falcom, Mr. Al Baiz was Account Manager at AlJazira Paper Compnay and Operations Assistant at Riyad Bank. He holds a bachelor’s degree in Accounting from King Saud University and holds a General Securities Qualifications Certificate (CME1) from the Capital Market Authority (Saudi Arabia)

• Ata Hamad Mohammad Al Bayouk – Board Member

Mr. Ata Al Bayouk is the Chairman of the Risk Committee.  Currently he sits on the Boards of Masarat Car Rental company and Gulf Integrated Industries Company (Integrated). He is also the Chairman of the Audit Committee of Integrated Co. Ata Holds the position of managing his own professional firms, Albayouk Chartered Accountants, Alfaisaliah Management Consulting and Albayouk Translation. His previous professional experience includes Board Member of Falcom Financial Services Co, Member of the executive Committee of Ernst Young (EY). Managing Partner of EY Riyadh. Represent EY in the International Tax Committee in New York. He served his 3 years article ship (trainee) with Navel Russel, Brighton, England.  Ata has served as Accountant and then Deputy Projects Financial Manger at Petromin. He Holds a Bachelor Degree in Accounting and Business Administration, King Saud University. He is a fellow member of the Institute of Chartered Accountant in England & Wales, Fellow member of the Egyptian Society of Accountants and Auditors and Founder Member of the Saudi Organisation of Certified Public Accountants (SOCPA)

Independent Members

• Nawaf Abdullah Ali Al Fozan – Board Member

Mr. Al Fozan is a member of the Company’s Risk Committee, and is currently CEO of Food Basics Trading Company, while sitting on the Board of Directors of SURE International Company and Thameen Fragrance (UK). Additionally, he is Chairman of the Board for the Specialized Food Company and for Al Fouzan Distribution Company. From 2009-2016, Mr. Al Fozan was CEO of Falcom Financial Services in Oman, while also holding the role of Managing Director of Private Investment Services from 2006-2016. Previously, he was the Head of Remote Delivery Channels in Alawwal Bank, and prior to that he was heading the  Business Development and Marketing & Sales at AwalNet, an affiliate of Al Faisaliah Group. Mr. Al Fouzan holds a bachelor’s degree in Accounting from King Saud University and an MBA from the University of Detroit (USA).

• Saleh Nasser Suleiman Al Omair – Board Member

Mr. Al Omair is a member of the Company’s Assets & Liabilities Committee, as well as sitting on the Board of the United Insurance Company. His previous roles have included Chairman of Hybrid Health Solutions (UAE) and Board membership of Najm Company, where he was also Chairman of the Executive Committee. From 2011-2013, he was CEO of Amana Cooperative Insurance, having previously been CEO at Solidarity Saudi Takaful Co. He has also held the positions of Vice President at Tawuniya Insurance Company and Strategic Training & HR Manager at Saudi Telecom (STC). Mr. Al Omair holds a bachelor’s degree in Business Administration from the University of South Florida (USA); a master’s degree in Change Management from Swansea University (UK); American medical insurance fellowship of the Health Insurance Association of America (USA); and a Certificate of Professional Competence in General Insurance from the Chartered Institute of Insurance (UK).

• Mohammad Taher Abdul Karim Al Louzi – Board Member

In addition to his role on the Nayifat Board of Directors and as a member of the Strategic Committee, the Audit Committee and the Chairman of the Nomination & Remuneration Committee Mr. Al Louzi is Deputy CEO and Managing Director Investment Banking at Saudi Kuwaiti Finance House. His previous professional experience includes as Manager of Investment Banking & Private Equity at Saudi Kuwaiti Finance House, Managing Director of Investment Banking at Falcom Financial Services, Faculty Member in the Institute of Banking at SAMA, Head of Corporate Finance for the Social Security Fund (Jordan), and Portfolio Manager & Senior Financial Analyst at the Equity & Enterprise Department of the Jordan Social Security Corporation (Jordan). Mr. Al Louzi holds a BSc. in Economics & Statistics from Jordan University (Jordan) and an MSc. in Corporate Finance from the University of Salford Manchester (UK). In addition, he is a Chartered Financial Analyst (CFA) of the Institute of Chartered Financial Analysts (USA), he holds a CIPOS certificate from the American Academy of Financial Management (USA) and General Securities Qualifications Certificate (CME1) from the Capital Market Authority (Saudi Arabia).

• Hussain Alshakrah – Secretary of the Board of Directors

In addition to his role as Secretary of the Board of Directors, Mr. Alshakrah is Head of the SME Finance Department at Nayifat. His past experience includes as Credit & Risk Manager at Nayifat, having previously held the role of Credit Card Coordinator at both Alawwal Bank and Samba Financial Group. Mr. Alshakrah holds a bachelor’s degree from the Faculty of Arts at King Saud University, has completed the Chamber of Commerce & Industry’s Certified Accountant course for Non-Accountants, and holds a Mini Professional MBA from the Arab Union for Human Resource Development (Turkey).

SENIOR MANAGEMENT

Nayifat, with the counsel provided by a diverse Board of Directors, benefits from a highly experienced management team, who possess market-leading experience in the local non-bank financing industry. Senior members of management include:

• Abdulmohsen Al Sowailem – Managing Director and CEO

Abdulmohsen took his role of Managing Director and CEO at Nayifat Finance Company in 2014, in addition to which he has been a Board Member since 2013 and a member of the Assets & Liabilities, Executive and Strategic Committees since 2015. He also sits on the Board of Directors of Falcom Holding Company, Falcom Financial Services, Gulf Integrated Industries Company, and LSC Warehousing & Logistics. 

Abdulmohsen’s previous professional experience includes as CEO of Logistics Services Company (2010-2014), and Board membership at the Saudi Ceramic Company (2010-2016), Filing & Packing Materials Company (2010-2016), and Arabian Pipes Company (2009-2012). From 2003-2005 he was Marketing & Strategy Business Development Manager at Al Rajhi Investment, having been Head of Marketing at Arab National Bank and First Line Manager at Saudi American Bank (now Samba Financial Group). Abdulmohsen holds a Bachelor of Business Administration degree from King Saud University, a Ministry of Trade & Investment License No. 130 (Financial Adviser), and a Ministry of Commerce & Investment License No. 245 (Administrative Consultant).

• Aariff Ahmed – Chief Financial Officer and Treasurer

Aariff joined Nayifat as CFO in 2012. Prior to joining the Company, he had served as CFO of Alinma Investment Company (2009-2012); Financial Controller at Emirates NBD Bank (2004-2009); held various positions in Finance – the last in charge of External Reporting – at Saudi British Bank (SABB) from 1993-2004; and a number of positions at Andhra Bank – the last as Officer in International Banking (Bombay) – from 1984-1993. Aariff holds an MBA from Manchester Business School and is a Certified Associate of the Indian Institute of Banking and Finance (IIBF). He also holds a bachelor's degree in Mathematics from Osmania University (Hyderabad), and a bachelor's degree in Law from Andhra University (Visakhapatnam), and holds a General Securities Qualifications Certificate (CME1) from the Capital Market Authority (Saudi Arabia). In addition to his role as CFO, Aariff is a member of the Assets & Liabilities Committee.

• Gohar Iqbal Shaikh – Director of Finance & Strategy

Gohar took up his role as Director of Finance & Strategy at Nayifat in 2019, having previously been Financial Controller at Meezan Bank (2018-2019) and Chief Financial Officer at Bank Al Bilad (2008-2017). His prior professional experience includes the roles of Country Head Finance & Operations at Bank Islami Pakistan Ltd; Chief Financial Officer at Meezan Bank; SVP Finance at Crescent Investment Bank; VP Finance at National Development Finance Corporation; Head of Internal Audit at Welcome Pakistan; and Audit Senior at Ernst & Young. Gohar is a Fellow Member of the Institute of Chartered Accountants of Pakistan and holds a Bachelor of Commerce degree from the University of Karachi.

• Mohammed Abdulrahman El-Shami – Head of Risk Management

Prior to taking up his role as Head of Risk Management, Mohammed was Head of Advisory Services at Ata Al Bayouk Chartered Accountants, having previously been Chief Risk Officer at Albilad Capital (2016-2017), Chief Risk Officer at Saudi Fransi Capital (2013-2016) and Senior Manager for Risk Advisory Services at Ernst & Young Riyadh (2004-2013). He holds a bachelor’s degree in Business Administration and an MBA from Northeastern University (USA). Mohammed is also a Certified Internal Auditor with the Institute of Internal Auditors (USA) and has completed the Saudi CMA’s Capital Market Examination (CME1).

-Ends- 

About Nayifat Finance Company

Nayifat Finance Company is Saudi Arabia’s leading non-bank financial institution (“NBFI”) for consumers and SMEs. Established in 2002 and headquartered in Riyadh, Nayifat was among the first institutions in Saudi Arabia to be licensed as a Finance Company by the Saudi Arabian Monetary Agency (SAMA). Nayifat is the preferred NBFI in Saudi Arabia, providing Shari’a-compliant financing solutions – including Tawarruq, Murabaha and Ijarah – to more than 250,000 customers since inception (as at 31 March 2019). In 2019, Nayifat entered the local credit card market in partnership with Visa, becoming one of the first Saudi Finance Companies to receive a credit card license from SAMA as a principal issuer. With a network of 24 branches across the Kingdom, and more than 40,000 active creditworthy customers, Nayifat’s gross asset portfolio stands at SAR 2.23 billion as at 31 March 2019. To find out more, visit www.nayifat.com.     

Enquires
Media enquiries
Instinctif Partners (GCC/international)
George Allen
+971 55 104 3586
george.allen@instinctif.com  

Advert One (Saudi Arabia)
Mustafa Othman
+966 50 523 4749
mustafa.othman@advert1.com 

Financial advisor
NCB Capital
Abdulaziz Behery
+966 11 874 7106
NCBC.CM@alahlicapital.com

Co-Financial advisor
Falcom Financial Services
Rami Atwan
+966 11 211 8487
Rami.Atwan@falcom.com.sa 

Disclaimer

This announcement is for information purposes only and under no circumstances shall constitute an offer or invitation, of form the basis for a decision, to invest in any securities of the Company.

 This announcement is being distributed in accordance with Article 33(g) of the Rules on the Offer of Securities and Continuing Obligations (“OSCOs”) issued by the Capital aMarket Authority in Saudi Arabia (the “CMA”) for the purposes of ascertaining the extent to which potential investors are willing to participate in the potential initial public offering of Nayifat Finance Company (the “Company”), and should not result in any binding undertakings to acquire shares or subscribe in the Company’s initial public offering. Neither this announcement nor anything contained herein shall form the basis of, or be relied upon in connection with, any offer or commitment whatsoever in any jurisdiction. Investors may only subscribe in the securities referred to in this announcement on the basis of the CMA approved prospectus to be issued and published in due course (the “Prospectus”). Copies of the Prospectus will, following publication, be available from the Company’s registered office and its website at https://www.nayifat.com/ 

This announcement is not an offer document for the purposes of the OSCOs and should not be construed as such. The CMA and the Saudi Stock Exchange (Tadawul) do not take any responsibility for the contents of this announcement, do not make any representations as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this announcement.

The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed by any person for any purpose on the information contained in this announcement or its accuracy, fairness or completeness. The information in this announcement is subject to constant change.

The distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

This announcement is not an offer for sale of securities of the Company in or into the United States. The shares referred to herein may not be offered or sold in the United States unless registered under the US Securities Act of 1933, as amended (the “Securities Act”), or offered in a transaction exempt from, or not subject to, the registration requirements of the Securities Act. The Company has not registered and does not intend to register any portion of the shares subject to the Offering under the Securities Act or the laws of any state in the United States or to conduct a public offering of any securities in the United States. Copies of this announcement are not being, and may not be, distributed, forwarded or otherwise sent, directly or indirectly, in or into the United States.

This announcement does not contain or constitute an offer of, or the solicitation of an offer to buy, the shares referred to herein to any person in the United States, Australia, Canada, South Africa or Japan or in any jurisdiction to whom or in which such offer or solicitation is unlawful. The offer and sale of the shares referred to herein has not been and will not be registered under the applicable securities laws of Australia, Canada, South Africa or Japan. Subject to certain exceptions, the shares referred to herein may not be offered or sold in Australia, Canada, South Africa or Japan or to, or for the account or benefit of, any national, resident or citizen of Australia, Canada, South Africa or Japan. There will be no public offer of the shares in Australia, Canada, South Africa or Japan.

In member states of the European Economic Area (“EEA”) (each, a “Relevant Member State”), this announcement and any offer if made subsequently is directed only at persons who are “qualified investors” within the meaning of the Prospectus Directive (“Qualified Investors”). For these purposes, the expression “Prospectus Directive” means Directive 2003/71/EC (and amendments thereto, including Directive 2010/73/EU), and includes any relevant implementing measure in the Relevant Member State. In the United Kingdom this announcement is directed exclusively at Qualified Investors (i) who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”) or (ii) who fall within Article 49(2)(A) to (D) of the Order, and (iii) to whom it may otherwise lawfully be communicated, and any investment activity to which it relates will only be engaged in with such persons and it should not be relied on by anyone other than such persons.

This announcement may include statements that are, or may be deemed to be, “forward-looking statements”. These forward-looking statements may be identified by the use of forward-looking terminology, including the terms "aim," "anticipate," "believe," "can," "consider," "could," "estimate," "expect," "forecast," "intend," "may," "ought to," "potential," "plan," "projection," "seek," "should," "will," "would," or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. Any forward-looking statements reflect the Company’s current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Company’s business, results of operations, financial position, liquidity, prospects, growth or strategies. Many factors could cause the actual results to differ materially from those contained in projections or forward-looking statements of the Company, including, among other things, risks specifically related to the Company and its operations, the development of global economic and industry conditions, and the impact of economic, political and social developments in Saudi Arabia. Forward-looking statements speak only as of the date they are made. Each of the Company, the Joint Financial Advisors and their respective affiliates expressly disclaims any obligation or undertaking to update, review or revise any forward-looking statement contained in this announcement whether as a result of new information, future developments or otherwise.

 There is no guarantee that the Offering will occur and you should not base your financial decisions on the Company’s intentions in relation to the Offering at this stage. This announcement does not constitute a recommendation concerning the Offering nor any declaration or undertaking by any means. Acquiring shares to which this announcement relates may expose an investor to a significant risk of losing the entire amount invested. Persons considering investment should consult an investment advisor or an authorised person specializing in advising on such investments.

The Joint Financial Advisors are acting exclusively for the Company and no-one else in connection with the Offering. They will not regard any other person as their respective clients in relation to the Offering and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients, nor for providing advice in relation to the Offering, the contents of this announcement or any transaction, arrangement or other matter referred to herein.

The contents of this announcement have been prepared by and are the sole responsibility of the Company. None of the Joint Financial Advisors or any of their respective directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.

In connection with the Offering, each of the Joint Financial Advisors and any of their affiliates, may take up a portion of the securities in connection with the Offering as a principal position and in that capacity may retain, purchase, sell, offer to sell for their own accounts such securities and other securities of the Company or related investments in connection with the Offering or otherwise. Accordingly, references in the Arabic language prospectus or the international offering circular, once published, to the Company’s shares being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, placing or dealing by, the Joint Financial Advisors and any of their affiliates acting in such capacity. In addition, the Joint Financial Advisors and any of their affiliates may enter into financing arrangements (including swaps or contracts for difference) with investors in connection with which the Joint Financial Advisors and any of their affiliates may from time to time acquire, hold or dispose of securities. None of the Joint Financial Advisors intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

[1] Nayifat Finance Company: Audited Finance Statements 2015-2018 (External Auditor: PwC)

[2] FY Net Income (Pre Zakat)

[3] FY Net Income (Pre Zakat)

[4] Return on Average Equity and Profit Margins calculated per available published financials

[5] Non Real-Estate Finance Companies in KSA

[6] Sutherland: NBCI’s Consumer Finance Market in the KSA (August 2018)

[7] SAMA Financial Stability Report 2019

[8] Sutherland: NBCI’s Consumer Finance Market in the KSA (August 2018)

© Press Release 2019