Luberef Completes Stock Offer

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Luberef said last week that it attracted strong interest to its initial public stock offering, as the retail portion of the sale attracted enough buyers to purchase 2.3 times as many shares as were allotted for that portion.

The Dec. 14-18 offering to individual investors came two weeks after the close of the offering to institutional investors – known as the bookbuilding process – which was also oversubscribed. The number of shares conveyed to investors was to be allocated and prorated since the number up for sale was capped beforehand at 50,045,000.

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Those shares are owned by minority shareholder Jadwa Industrial Investment Co., an investment firm, and represent its 30% stake in Luberef. Majority shareholder, Saudi Aramco, is not selling any of its shares.

Luberef, which is based in Riyadh, Saudi Arabia and formally known as Saudi Aramco Base Oil Co., said beforehand that it wanted the offering to raise U.S. $1.3 billion. Luberef set the final sale price for the stock at 99 riyals ($26.30) per share, at the upper end of its target range. That price implies a market capitalization of $4.44 billion.

In its prospectus for the offering, the company stated that it intends to expand its base oil plant in Yanbu’ al Bahr, Saudi Arabia, and to add ability to make API Group III base stocks. The facility currently has capacity to make 1.1 million metric tons per year of Group I and II oils. Officials have not provided details about the expansion project.

Luberef also operates a second plant in Jeddah, Saudi Arabia, with capacity to make 275,000 t/y of Group I base oil.

The traded stock shares are listed on the Main Market of the Saudi Exchange.

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