SISCO CEO Mohammed Al-Mudarres
The International Water Distribution Co. Ltd. (Tawzea), a subsidiary of Saudi Industrial Services Co. (SISCO), plans to float 15-30% in an initial public offering (IPO), CNBC Arabia reported, citing SISCO CEO Mohammed Al-Mudarres.
He added that a final decision on the offering stake has not been taken yet, as the file is still under study and will be announced in due course.
Tawzea has strong financial solvency, and its capital is enough to finance the company's projects and business, Al-Mudarres said.
He added the water distributor does not plan currently to increase its capital before the IPO. However, this issue will be studied when evaluating the company and its market share to determine the offering stake and whether the firm needs to increase its capital.
Tawzea is currently sitting on a pile of cash and has strong relations with banks, the top executive said, noting that the firm continues to receive additional finance to fund its future projects.
The IPO decision is based on the company's robust financial solvency, performance, and profitability over the last years. Moreover, the firm has a strong experience that enables it to win major projects in the water treatment sector at a total value of nearly SAR 3 billion, including Taif independent wastewater treatment plant project and other projects in Madinah, Tabuk and Buraidah, as part of the water sector privatization program.
Al-Mudarres further said the company works in the water distribution sector in the industrial cities, pointing out that Tawzea's share in the new water projects offered for privatization is 40%, with a consortium of local and foreign companies.
The potential offering is a long-term strategic decision to enhance the company's financial solvency and position in the water market, with the aim of obtaining major projects and helping it expand as part of the sector privatization.
According to data available with Argaam, Saudi Arabian Amiantit Co. and SISCO announced that shareholders of their subsidiary Tawzea approved, on Dec. 23, to convert the subsidiary from a limited liability company to a closed joint stock company.
Amiantit and SISCO own 50% of Tawzea's share capital which amounts to SAR 146 million, Argaam earlier reported.
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