RIYADH: In a bid to take advantage of the booming economic growth in the Gulf region, Saudi private equity firm Jadwa Investment Co. is seeking to up the ante by investing SR2 billion ($532 million) in new private equity deals and listing stakes in three of its portfolio companies by 2025.
The Riyadh-based Saudi closed joint stock company offers wide-ranging investment services with all its investments and financial services adhering to the high standards of Sharia compliance.
The private equity firm is in advanced talks to complete two private equity deals in the next 12 months and is focusing on consumer and healthcare industries, Bloomberg reported citing the company’s managing director and CEO Tariq Al-Sudairy.
The decision comes close on the heels of the investment bank fully divesting its 30 percent stake in Saudi Arabian Oil Co.’s refining unit Saudi Aramco Base Oil, known as Luberef, following an initial public offering in Riyadh that raised SR4.95 billion.
The divestment marked Jadwa’s eighth private equity exit, bringing its total private equity distributions to customers to SR11 billion, Bloomberg reported Tuesday, citing a press release.
Luberef is the latest billion-dollar-plus IPO in the oil-rich Gulf region, bucking a global slowdown in share sales. The deal comes late in the year when many investors typically shy away from taking on risk. High oil prices have benefited Gulf economies, markets and companies’ balance sheets, helping drive a flurry of listings.
The IPO would take the proceeds of Gulf listings this year to over $20 billion, an amount that would be an annual record if it were not for 2019, when Aramco went public, raising almost $30 billion.
The region now accounts for about half of all IPO proceeds in Europe, the Middle East and Africa, data compiled by Bloomberg show.
Luberef presently operates two production facilities on Saudi Arabia’s west coast, producing various base oils and byproducts, including asphalt, marine heavy fuel oil and naphtha.
The company’s base oil production capacity of 1.3 million metric tons per annum positions it as the second largest producer by capacity in the Middle East in 2021, leveraging its long-term agreements with Saudi Aramco for the provision of its high-quality Arab-light feedstock.
Its production assets have a competitive scale globally, with the Yanbu facility ranking among the largest 10 refining facilities in terms of capacity when including the planned Yanbu Growth II expansion project.
