Arabian Drilling hires Goldman, HSBC, SNB Capital for IPO

Arabian Drilling hires Goldman, HSBC, SNB Capital for IPO

Arabian Drilling Company, a Saudi oilfield-services firm partly held by Schlumberger NV, hired Goldman Sachs Group, HSBC Holdings Plc and SNB Capital to manage its IPO in Riyadh, seeking to join a steady stream of Gulf firms tapping equity markets.

The firm will sell 26.7 million shares, or a 30 percent stake, in initial public offerings, according to a statement. The offer price will be determined following a book-building period from September 28 to October 5.

About a third of the IPO will be new shares, and the proceeds will be used to scale up onshore and offshore fleet and expand operations in the Gulf Cooperation Council region, it said.

Arabian Drilling operates 45 rigs and had revenue of $586 million last year. It also has an order backlog of $2.2 billion.

Ghassan Mirdad, chief executive officer at Arabian Drilling, said in an interview: “We are in a period of unprecedented growth for Arabian Drilling – oil prices are up, demand for energy is high and we are growing. We have a clear strategy for growth, in Saudi or outside, and this needs a lot of funding.”

Investor appetite for Saudi listings remains strong, though a rally in Middle Eastern equities has faded over the past few months as fears of recessions gripped global markets.

Saudi Arabia is home to the Middle East’s biggest stock market and saw 10 IPOs in the past 12 months, raising a combined $6.55 billion, according to data compiled by Bloomberg.

The company was founded in 1964 and counts Saudi Aramco, the kingdom’s state energy producer, among its main customers.

Mr Mirdad said that the company is looking to capitalise on Aramco’s plans to significantly boost its oil and gas production, whilst also expanding its operations in the Middle East and eyeing potential acquisitions.

Saudi Arabia’s Industrialisation and Energy Services, a firm which is majority controlled by Saudi wealth fund the Public Investment Fund, owns 51 percent of Arabian Drilling. Services Petroliers Schlumberger owns the rest.

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21st September 2022