Saudi Arabia developer Umm Al Qura picks banks for IPO

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Saudi property developer Umm Al Qura for Development & Construction Co. is working with banks including Lazard Ltd. on its planned Riyadh initial public offering, according to people familiar with the matter.

Umm Al Qura has picked Al Bilad Capital and GIB Capital to work on the IPO while Lazard is advising it, the people said, asking not to be identified as the information isn’t public. An IPO of the company could raise a few hundred million dollars, two of the people said.

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Details of the offering such as size and timing are still preliminary and subject to change, the people added. Representatives for Umm Al Qura, Lazard, Al Bilad Capital and GIB Capital didn’t respond to requests for comment.

Saudi Arabia was part of an IPO boom that swept the Middle East last year on the back of high oil prices and strong investor demand. Listings in the region accounted for about half of the proceeds in all of Europe, the Middle East and Africa, as deals elsewhere collapsed under the pressures of high inflation and rising interest rates.

Umm Al Qura is involved in the development of a large project in the Muslim holy city of Mecca, its website shows. Jabal Omar Development, one of the Kingdom’s biggest listed developers, had been in talks to acquire Umm Al Qura in 2018.

Mecca has an important role in Saudi Arabia’s drive to boost tourism as part of an effort to wean the economy off oil. Crown Prince Mohammed bin Salman plans to invest $1 trillion in developing the tourism industry in a bid to attract 100 million visitors by 2030, which would make the Kingdom one of the most popular destinations in the world.

Religious tourism will be a large part of that, and the government and developers have been building malls and hotels in Mecca to cash in on pilgrims’ spending.

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