Saudi auto rental firm Lumi to float 30% in IPO
24/08/2023 16:39
By Hadeel Al Sayegh
DUBAI, Aug 24 (Reuters) - Saudi Arabia's Lumi, one of
the largest auto rental firms in the kingdom, on Thursday
announced plans to proceed with an initial public offering on
the Saudi Exchange.
Riyadh-based Lumi said it expects to issue 16.5 million
existing shares, resulting in a free float of 30%.
Sources told Reuters in April that Lumi had hired Saudi
Fransi Capital 1050.SE as financial advisor and bookrunner and
EFG Hermes HRHO.CA as bookrunner to arrange the sale of 30% of
its shares.
Lumi confirmed those appointments and said Riyad Bank,
Banque Saudi Fransi and Saudi National Bank have been appointed
as receiving banks.
The share sale is set to be a litmus test for the Gulf IPO
market after a slow summer period.
Issuers from the Middle East and North Africa raised more
than $5 billion in the first half of this year, consultancy EY
said in a report earlier this month, with the bulk coming from
Saudi Arabia and the United Arab Emirates.
The proceeds were down 60% compared with the first half of
last year, which was an exceptionally strong year for the Gulf
IPO market.
Deal activity is expected to remain "healthy" in the second
half of the year and into 2024, EY said in the report.
Lumi is a wholly-owned unit of Seera 1810.SE , a Saudi
travel company formerly known as Al Tayyar Travel Group.
The auto rental firm ranked itself as the third-biggest
operator in the country with a market share of about 7%, based
on its fleet size in 2021, according to its IPO prospectus.
Its fleet grew to 24,730 by the end of April from more
than 19,600 at the end of September 2022, the prospectus said.
Lumi made a profit of 100 million riyals ($26.66 million) in
the first half of 2023, up from 72 million riyals in the first
half of 2022.
The country's car rental market is expected to grow at a
compound annual growth rate of 8.6% up to 2027, to reach a
market size of 9.8 billion riyals, according to research from
Glasgow Research & Consulting.
($1 = 3.7514 riyals)
(Reporting by Hadeel Al Sayegh; Additional reporting by Yousef
Saba; Editing by Susan Fenton)
((Hadeel.AlSayegh@thomsonreuters.com; +971566883310))