RIYADH: Saudi Arabia’s Capital Market Authority has approved the registration and initial public offering of 50 million shares of Luberef Refinery unit of Saudi Aramco’s base oils company, representing 29.6 percent of the company’s capital, according to a statement.

The company’s prospectus is expected to be published sometime in the near future prior to the start of the subscription period. It will include pertinent information such as the company’s financial statements along with its activities and management. This information is intended to assist potential investors before making an investment decision.

Investors are strongly encouraged to carefully review the prospectus, which includes detailed information about the company as well as exposure and risk factors, before making a decision to subscribe.

This will help potential investors to assess the feasibility of investing in the offer and thus limit the high risks.

The approval of the Capital Market Authority on the application will be valid for a period of 6 months during which the company’s offering and listing will be completed, otherwise the approval of the application will be revoked.

While the approval of the Capital Market Authority does not mean that it recommends subscribing to the offer, it only reflects that the company has fulfilled the legal requirements under the Capital Market Law and its Implementing Regulations.

Earlier this year, Saudi Aramco’s Luberef refinery unit announced plans for an initial public offering with the goal of raising more than $1 billion, Bloomberg reported, citing people familiar with the matter.

According to the report, Aramco has appointed the local unit of HSBC Holdings Plc and SNB Capital to advise on the bid.

The sources, who requested anonymity, also indicated that the company’s current plan is to sell a 30 percent stake owned by Jadwa Investment Company.

In 2007, Jadwa acquired a stake in Luberef from Exxon Mobil Corp.

With this new move, Luberef will join the long list of several Aramco subsidiaries already listed on the Saudi Stock Exchange.

These include the Saudi Basic Industries Corporation, and the Rabigh Refining and Petrochemical Company.

In addition, Luberef announced last month that it intends to launch a new specialized production facility in Yanbu to manufacture transformer oil and white oils used in the power generation, pharmaceutical and food industries.

Dubbed the Lube Hub, the facility will enable the localization of these specialized products in the Kingdom. The project will attract producers and operators of essential oils related products.

“We are trying to attract investments from companies to start some specialized products that are not produced in Saudi Arabia, including transformer oil and white oil,” Tariq Al-Naim, President and CEO of Luberef, told Arab News.



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