Nass Corporation has announced successful completion of the first phase of its IPO plans - the private placement of shares with Gulf-based strategic investors.
The successful completion of the private placement paves the way for Nass Corporation BSC, which is currently under formation, to be established and listed on the Bahrain Stock Exchange through a public share offer later this year. It will be Bahrain’s first regional family-owned conglomerate operating in the construction sector to go public and the largest Initial Public Offering (IPO) on the Bahrain Stock Exchange in the Kingdom in the last eight years.
The Nass Corporation will be formed from the construction, contracting and other related businesses of the Nass Group, which celebrated its 40th anniversary last year.
The private placement was oversubscribed during the recently concluded offer period, which focused on attracting selected GCC businesses and institutions as strategic investors to play a key role in the ownership and management of the new Nass Corporation.
Five GCC-based business groups – the majority of them diversified business entities – have taken a 24% share of the Nass Corporation. The strategic investors group will have representation on the corporation board, in accordance with the Commercial Companies Law of Bahrain
The next stage is the IPO process starts in the fourth quarter of the year when 25% of shares will be offered to public investors in Bahrain and the GCC; the founding shareholders will retain a majority shareholding in the Nass Corporation.
“The private placement was a resounding success and we are delighted to have attracted this high calibre of strategic investors from the region,” said Nass Group Managing Director, Sameer Abdulla Nass. “Enquiries from interested parties are still being received, even after the private placement is closed. This clearly demonstrates a high level of confidence in the potential of Nass Corporation as a regional player.”
The strength of interest in this construction-sector placement from large regional diversified businesses is seen by Mr Nass as testament to the strength of the sector, as well as investors’ growing confidence in the region.
“Construction as a sector is booming, certainly. What is encouraging is that investors of such high calibre have confidence in the long term prospects of the construction sector regionally,” explained Sameer Abdulla Nass. “Each strategic investor is diversifying into construction through their partnership with Nass Corporation, which we see as an equal endorsement of our skills as a business and of the potential of the sector as an investment class.”
The decision to ‘go public’ was taken some years ago, with the family - headed by pioneer Abdulla Ahmed Nass - strongly believing the public ownership route is the best way to ensure a positive future for the group.
The success of the private placement is doubly exciting for Bahrain as it paves the way for the largest IPO the Kingdom has seen in eight years, providing a new opportunity for the investing public to own shares in one of the Kingdom’s “national companies”.
Once the IPO is completed, the newly formed company – which will have an initial paid-up capital of BD20 million (US $53 million) will be listed on the Bahrain Stock Exchange, and investors will then be able to buy and sell shares freely, taking an active role in the company’s future, and benefiting personally from involvement in stock trading. Nass Corporation has plans to seek cross-listing on another GCC stock exchange in the future.
“This IPO comes at a time when there is a growing sense of public and private sector confidence in the region and a willingness to invest locally. This particularly extends to the construction sector which has seen increased spending on infrastructure development, real estate, property development and other construction activities,” said Mr Nass.
“The value of new projects in the Kingdom - which are either in progress or which have been just announced – currently totals more than BD 4 billion (US$ 10.7 billion). With a healthy order book on hand and projects currently under tender in the range of around US $250 million, we believe this positive trend is entirely sustainable and will continue for the foreseeable future,” he added.
Securities and Investment Company (“SICO”) and KPMG Corporate Finance are lead managers and financial advisors on the transaction. Further details about the IPO will be made available shortly.
