September 21, 2023 [Oil Price]- Saudi Arabia’s PIF-backed oil and gas driller ADES Holding has set the final price for its initial public offering (IPO) at the top-end of the set range, implying a valuation of 15.242 billion riyals ($4.06 billion).
Last week, Reuters reported that the IPO was expected to be priced at around 13.50 riyals a share, again the top-end of a previously announced range.
The IPO, the second on the Saudi Exchange this year, is expected to raise ~$1.22 billion from the sale of more than 338.7 million existing and new shares, good for 30% of the company’s share capital. ADES is an oilfield services company ADES that operates a fleet of offshore and onshore rigs across the Middle East, North Africa and India.
The IPO is a bright spot in the continent considering how dealmaking has recorded a big decline in the current year. According to preliminary Refinitiv data cited by HellenicShippingNews, total M&A value in Asia through June dropped 41% year on year to just $362 billion, the lowest level since 2013.
HSN cited Choe Tse Wei, managing director of strategic advisory at Singapore’s DBS Group, as saying that geopolitical chaos has caused Chinese outbound investment to be redirected away from North America, Western Europe, and Australia toward Southeast Asia and other emerging markets, and also taken a toll on investments into China. Outbound M&A fell by a third to $7 billion, the lowest level since 2006 with deals involving Chinese companies dropping 35%Y/Y to $125.4 billion.
Luckily, Asia’s private equity sector is expected to see a lot more action. Private equity (PE)-backed deals totaled $53 billion in the first half, down 37% year on year, but are expected to gradually increase as the months roll on. Asian PE firms are currently sitting on $417 billion worth of dry powder, the highest on record. Private equity is quickly emerging as an important financier in the oil and gas markets as more traditional banks cut financing to fossil fuels.
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