What:
Investors submitted purchase requests for all shares offered by the company in the Saudi market, shortly after the start of the IPO on Thursday.
The subscription was covered in a price range of 44 riyals to 48 riyals per share, in an offering that could raise around 1.2 billion riyals for Modern Flour Mills.
This would value the company at 3.7 billion riyals (approximately $1 billion) if priced at the upper limit.
So What:
Modern Mills, formerly known as Milling Company 3, is part of a broader privatization program.
This is in line with Saudi Vision 2030, aimed at moving away from reliance on oil.
The Saudi company operates flour mills in Al-Jumum, Khamis Mushait, and Al-Jawf,
Modern Mills for Food Products was sold to a consortium of investors for 750 million riyals in 2020.
The selling shareholders in Mada International Holding Company, which owned 50% of Modern Mills for Food before the offering, as well as Al Ghurair Foods (45%) and Masafi (5%).
Some Context:
Data from the London Stock Exchange Group shows that Gulf Cooperation Council companies raised $11 billion from IPOs last year.
This was a 45% decrease from 2022.
These operations accounted for 40% of the revenues raised in the Europe, Middle East, and Africa region in 2023, a 56% decrease from the previous year.
Now What:
The offering for Modern Mills for Food Products involves selling 24.5 million ordinary shares, representing 30% of its capital, by existing shareholders.
The final offering price is expected to be announced on February 27, followed by individual investor subscription on March 3 and 4.
