Oil and Gas Driller ADES Holding Starts Marketing IPO to Institutional Investors

Oil and gas driller ADES Holding, backed by Saudi Arabia's sovereign wealth fund, began marketing its initial public offering on Sunday, seeking 12.50 riyals to 13.50 riyals a share.

ADES plans to raise as much as 4.57 billion riyals ($1.22 billion) from the sale of a 30% stake in the company through its public-share sale, according to a notification to investors on Sunday. 

Books were oversubscribed multiple times throughout the range within hours of opening, a separate notification said. Reuters reported in November that the planned IPO could fetch more than $1 billion, citing two people familiar with the matter.

The institutional book-building process will end on September 14. The final price for the shares will be set at the end of the book-building period. 

Headquartered in the Saudi Arabian city of Khobar, ADES operates a fleet of offshore and onshore rigs across the Middle East, North Africa and India. 

ADES, which counts Saudi Aramco, Kuwait Oil Co, and North Oil Company in Qatar as key clients, announced on August 28 its planned flotation on the Saudi Exchange through the sale of existing and new shares.

Selling shareholders PIF, ADES Investments Holdings and Zamil Group Investment will collectively sell 101,615,626 existing shares in proportion to their shareholding.

ADES will also issue 237,103,128 new shares.

Part of the proceeds would be distributed to ADES's shareholders in proportion to their shareholding being sold, according to the notification on Sunday. 

The remaining proceeds would be used to pay down some of the company's debt and finance its growth plans, the notification said.

ADES International listed on the London Stock Exchange in 2017. In 2021, Saudi Arabia's Public Investment Fund (PIF) partnered with ADES' major shareholders - ADES Investments Holding and Zamil Group Investment - to take the firm private.

That deal valued ADES at $516 million at the time.    

($1 = 3.7508 riyals)

(Reuters - Reporting by Hadeel Al Sayegh;Editing by Elaine Hardcastle; Editing by Sharon Singleton)

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