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MENAFN - Arab News - 31/01/2010

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(MENAFN - Arab News) Saudi-based floor covering manufacturer Alsorayai Trading and Industrial Group will raise SR243 million (64.8 million) from an initial public offering that starts Monday, the IPO's financial adviser said.

"We priced the shares at SR27 each," a spokeswoman at Aldukheil Financial Group said on Saturday.

Alsorayai is offering 30 percent of its capital, or 9 million shares, over the Feb. 1-7 period. This would be the second IPO in the Saudi market this year after fast-food chain Herfy Food Services Company.

Alsorayai was set up in 1953 by Alsorayai brothers from Mecca to import handmade carpets from India, Iran and Pakistan before they started importing manufactured carpets and rugs from Europe.

It opened its first carpet and rugs factory in 1986 and currently has a production capacity of 86 million square meters per annum. About 75 percent of the firm's revenue comes from the Saudi market and the remainder from 65 countries, according to the company's website.

The firm, which currently employs 2,400 people, leads some 17 competitors domestically with a market share that reached 36.7 percent in 2007.

Its listing prospectus — which does not include the IPO's price yet — showed that total carpet and rug sales in Saudi Arabia rose 8 percent in 2008 to 1.35 billion riyals after falling 23 percent in 2007.

Internationally, Alsorayai competes with firms such as Interface. Alsorayai estimates its own global market share in floor covering products at 0.49 percent.

Proceeds of the sale will go to Alsorayai's shareholders, the prospectus said, adding: "The firm (Alsorayai) will not get any part of the IPO's proceeds."

Its net profit in 2008 fell to SR73.9 million from SR84.4 million a year earlier, while turnover increased to SR937 million riyals from SR840.9 million in 2007, according to its listing prospectus.

During the first half of 2009, Alsorayai made a net profit of SR36.1 million on sales of SR437.7 million, up from respectively SR33 million and SR446 million during the year-earlier period.

Meanwhile, Saudi shares ended lower for a third consecutive day on Saturday.

The Tadawul All-Share Index (TASI) closed 0.5 percent down at 6,221.16 points, with the biggest losses in the banking sector whose index dropped almost 1 percent to 16,098 points.

Al-Rajhi Bank shares declined 0.67 percent while Samba Financial Group dropped 1.87 percent.

Saudi Basic Industries Corp. (SABIC) shares were slightly higher at 0.3 percent.

A negative day for the market, with 11 sectors on the sector front closing with losses, which ranged from 0.10 percent in the Media & Publishing sector, to a loss of 1.20 percent in the Multi-Investment. Gains were only seen in the other four sectors, Agriculture & Food Industries, Transport, Energy & Utilities and Insurance, which were up 0.06 percent, 0.27 percent, 0.29 percent and 2.23 percent respectively. Overall market breadth was again negative, with 45 advancers and 71 decliners registering an AD ratio of 0.63, the Jeddah-based Financial Transaction House (FTH) said in its daily market commentary.

The stock market turnover was over SR2.54 billion on Saturday.

The Capital Market Authority (CMA) announced Saturday that the listing and trading of Gulf General Cooperative Insurance Company will take place on Feb. 8 and Buruj Cooperative Insurance Company on Feb. 15 within the Insurance sector.


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