Saudi Aramco Base Oil Company (Luberef), the refining unit of oil major Saudi Aramco, said it plans to proceed with an initial public offering, as the world’s biggest crude producer seeks to list some of its subsidiaries.
Luberef will sell 50 million shares, or 29.7 per cent of the company's issued share capital, through the IPO on the main market of Saudi Arabia's Tadawul stock exchange, the company said in a statement on Sunday.
The company is selling existing shares owned by Jadwa Industrial Investment Company.
"Luberef’s IPO supports its growth ambitions and is expected to strengthen its already competitive business and unlock new opportunities for its stakeholders," said Tareq Alnuaim, president and chief executive of Luberef.
"Luberef will continue focusing on achieving growth in key end markets, especially where market dynamics present attractive demand outlooks.”
The intention to float comes after Luberef on Thursday received approval from Saudi Arabia's stock market regulator, the Capital Market Authority, for the IPO.
Luberef's IPO plans come amid a bumper year for company listings in the Gulf and Mena, despite declines in global markets, with Saudi Arabia and the UAE making up the majority of new listings amid high oil prices.
Oil giant Aramco owns 70 per cent of Luberef and Jadwa owns the remaining 30 per cent, which it acquired in 2007 from Exxon Mobil.
Aramco will not sell any of its shares in the offering and will continue to own 70 per cent of Luberef’s share capital after the offering, according to the statement.
The final pricing of the shares offered will be determined at the end of the book-building period, it said.
The shares are open for subscription by institutional, individual and qualified foreign investors. A maximum of 12.5 million shares, or 25 per cent of the total share offering, will be allocated to individual investors, the company said.
Established in 1976, Luberef currently operates two production facilities located on the west coast of the kingdom in Yanbu and Jeddah with a combined capacity to produce 1.3 million metric tonnes per year of base oils, according to its website.
The Aramco unit makes base oils used in lubricants for motor vehicles, ships and industrial machinery. Base oils are used across various sectors, where hydraulic, turbine and transmission fluids are required for production and manufacturing machinery, such as in the steel industry, food production, textiles and clothing.
Luberef’s products are sold mainly in the company’s key end markets including Saudi Arabia, other countries across the Middle East, North Africa and India, it said. Its products are also sold across Asia, the Americas and Europe.
Luberef's revenue in 2021 reached 8.8 billion Saudi riyals ($2.4 billion). Its profits before interest, tax, depreciation and amortisation in 2021 stood at 2.1 billion riyals.
Last year, the company distributed about 938 million riyals in dividends.
"Luberef’s listing on the main market of the Saudi Exchange adds an important strategic dimension to the company’s growth strategy, while facilitating our vision to be the leading supplier of premium base oils and speciality products," said Ibrahim Al Buainain, chairman of Luberef.
Demand for base oils is expected to grow at a compound annual rate of 3.5 per cent and 4.8 per cent between 2022 and 2030, the company said in the statement.
"The demand outlook for base oils is further supported by strong macro fundamentals in Saudi Arabia and the broader Middle East region, which are key end markets for Luberef," it said.
Luberef has appointed SNB Capital as the lead manager on the offering.
SNB Capital, HSBC, Citigroup and Morgan Stanley are joint financial advisers, bookrunners, global co-ordinators and underwriters of the deal.
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UAE currency: the story behind the money in your pockets
The Intruder
Director: Deon Taylor
Starring: Dennis Quaid, Michael Ealy, Meagan Good
One star
How much do leading UAE’s UK curriculum schools charge for Year 6?
- Nord Anglia International School (Dubai) – Dh85,032
- Kings School Al Barsha (Dubai) – Dh71,905
- Brighton College Abu Dhabi - Dh68,560
- Jumeirah English Speaking School (Dubai) – Dh59,728
- Gems Wellington International School – Dubai Branch – Dh58,488
- The British School Al Khubairat (Abu Dhabi) - Dh54,170
- Dubai English Speaking School – Dh51,269
*Annual tuition fees covering the 2024/2025 academic year
How much of your income do you need to save?
The more you save, the sooner you can retire. Tuan Phan, a board member of SimplyFI.com, says if you save just 5 per cent of your salary, you can expect to work for another 66 years before you are able to retire without too large a drop in income.
In other words, you will not save enough to retire comfortably. If you save 15 per cent, you can forward to another 43 working years. Up that to 40 per cent of your income, and your remaining working life drops to just 22 years. (see table)
Obviously, this is only a rough guide. How much you save will depend on variables, not least your salary and how much you already have in your pension pot. But it shows what you need to do to achieve financial independence.
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
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Company profile
Date started: January, 2014
Founders: Mike Dawson, Varuna Singh, and Benita Rowe
Based: Dubai
Sector: Education technology
Size: Five employees
Investment: $100,000 from the ExpoLive Innovation Grant programme in 2018 and an initial $30,000 pre-seed investment from the Turn8 Accelerator in 2014. Most of the projects are government funded.
Partners/incubators: Turn8 Accelerator; In5 Innovation Centre; Expo Live Innovation Impact Grant Programme; Dubai Future Accelerators; FHI 360; VSO and Consult and Coach for a Cause (C3)
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The struggle is on for active managers
David Einhorn closed out 2018 with his biggest annual loss ever for the 22-year-old Greenlight Capital.
The firm’s main hedge fund fell 9 per cent in December, extending this year’s decline to 34 percent, according to an investor update viewed by Bloomberg.
Greenlight posted some of the industry’s best returns in its early years, but has stumbled since losing more than 20 per cent in 2015.
Other value-investing managers have also struggled, as a decade of historically low interest rates and the rise of passive investing and quant trading pushed growth stocks past their inexpensive brethren. Three Bays Capital and SPO Partners & Co., which sought to make wagers on undervalued stocks, closed in 2018. Mr Einhorn has repeatedly expressed his frustration with the poor performance this year, while remaining steadfast in his commitment to value investing.
Greenlight, which posted gains only in May and October, underperformed both the broader market and its peers in 2018. The S&P 500 Index dropped 4.4 per cent, including dividends, while the HFRX Global Hedge Fund Index, an early indicator of industry performance, fell 7 per cent through December. 28.
At the start of the year, Greenlight managed $6.3 billion in assets, according to a regulatory filing. By May, the firm was down to $5.5bn.
The bio
Who inspires you?
I am in awe of the remarkable women in the Arab region, both big and small, pushing boundaries and becoming role models for generations. Emily Nasrallah was a writer, journalist, teacher and women’s rights activist
How do you relax?
Yoga relaxes me and helps me relieve tension, especially now when we’re practically chained to laptops and desks. I enjoy learning more about music and the history of famous music bands and genres.
What is favourite book?
The Perks of Being a Wallflower - I think I've read it more than 7 times
What is your favourite Arabic film?
Hala2 Lawen (Translation: Where Do We Go Now?) by Nadine Labaki
What is favourite English film?
Mamma Mia
Best piece of advice to someone looking for a career at Google?
If you’re interested in a career at Google, deep dive into the different career paths and pinpoint the space you want to join. When you know your space, you’re likely to identify the skills you need to develop.
Killing of Qassem Suleimani
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Specs
Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
UAE currency: the story behind the money in your pockets
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Winners
Best Men's Player of the Year: Kylian Mbappe (PSG)
Maradona Award for Best Goal Scorer of the Year: Robert Lewandowski (Bayern Munich)
TikTok Fans’ Player of the Year: Robert Lewandowski
Top Goal Scorer of All Time: Cristiano Ronaldo (Manchester United)
Best Women's Player of the Year: Alexia Putellas (Barcelona)
Best Men's Club of the Year: Chelsea
Best Women's Club of the Year: Barcelona
Best Defender of the Year: Leonardo Bonucci (Juventus/Italy)
Best Goalkeeper of the Year: Gianluigi Donnarumma (PSG/Italy)
Best Coach of the Year: Roberto Mancini (Italy)
Best National Team of the Year: Italy
Best Agent of the Year: Federico Pastorello
Best Sporting Director of the Year: Txiki Begiristain (Manchester City)
Player Career Award: Ronaldinho
