ACWA Power, a leading private developer, owner, and operator of long-term contracted power generation and desalinated water projects worldwide announced its intention to float on the Riyadh bourse in an initial public offering (IPO) that could raise more than $1 billion.
The company, which is half-owned by the kingdom’s sovereign wealth fund, plans to issue 85.3 million shares, representing 11.67% of the company after a capital increase.
Around 4.14 million shares, representing 0.57% of the company, will be allocated to certain employees of the company and its subsidiaries as part of its employee IPO grant plan.
ACWA Power’s IPO is anticipated to raise more than $1 billion, valuing the company about $10 billion.
The Capital Market Authority on 30 June 2021 approved the Company’s application for the Initial Public Offering of 81,199,299 new ordinary shares, representing 11.1% of the Company’s enlarged share capital.
The final price at which all subscribers in the Offering will purchase Shares will be determined at the end of the book-building period which will begin on Sept. 15 and end on Sept. 27. The subscription period for individuals runs from Sept. 29 to Oct. 1. The final share allocations will be made on Oct. 4.
About 70% of the IPO proceeds will go towards financing the company’s equity contribution to upcoming projects and the remaining 30% will be used for general corporate purposes, ACWA said.
Nearly 160 million riyals ($42.66 million) from the proceeds will be applied to settle all the fees and expenses related to the IPO, including the fees of banks and lawyers.
The company made a profit of 902.4 million riyals in 2020, up from 880.1 million riyals in 2019 and a loss in 2018 of 898.9 million riyals, according to the prospectus.
ACWA Power originally planned an IPO in early 2018 but the plan was delayed by problems with a power plant project in Turkey.
Mohammad A. Abunayyan, Chairman of the Board of Directors, ACWA Power said, “We are deeply honored that the Public Investment Fund has entrusted us with spearheading the implementation of the National Renewable Energy Programme and proud to be a national champion, making tangible contributions to Vision 2030 initiatives.”
He added, “Affordable, low-carbon power generation and water desalination are critical for the sustainable development of economies. It is a privilege to be among the leaders in this field, relied upon by governments around the world to provide vital resources to their citizens. We believe the IPO will give new investors a unique opportunity to participate in the exciting opportunities that lie ahead.”
ACWA Power today has 64 projects in operation, construction, or advanced development in 13 countries across three continents, with a total project cost of SAR 248 billion (USD 66 billion).