Financial Advisor and Sole Bookrunner

331 Pages·2008·4.14 MB·English

PROSPECTUS
Offering of 462,500,000 Shares representing 50% of the total issued share capital of Saudi Arabi an Mining Company (Ma'aden) through an Initial Public Offering at an
Offer Price of SR20 per Share (representing a nominal value of SR10 per share and a premium of SR 10 per share)

SAUDI ARABIAN MINING COMPANY (MA'ADEN)
A Saudi Joint Stock Company established pursuant to Royal Decree M/17 dated 14/11/1417H (corresponding to 23/03/1997G) with Commercial Registration Number 1010164391 dated
10/11/1421H (corresponding to 04/02/2001G).
Subscription Period from Saturday 02/07/1429H (corresponding to 05/07/2008G To Monday 11/07/1429H (corresponding to 14/07/2008G)

Saudi Arabian Mining Company (Ma'aden) (hereinafter referred to as the “Company” or “Ma’aden”) was formed as a joint stock company pursuant to Royal Decree No. M/17 dated
14/11/1417H (corresponding to 23/3/1997G) and Council of Ministers Resolution No. 179 dated 8/11/1417H (corresponding to 17/03/1997G), with Commercial Registration Number
1010164391 dated 10/11/1421H (corresponding to 4/2/2001G) and with a share capital of SR4,000,000,000, comprising 400,000,000 shares with a nominal value of SR10 each (the
"Shares") wholly owned by Government of the Kingdom of Saudi Arabia represented by the Public Investment Fund (“PIF”). Pursuant to Council of Ministers Resolution No. 49 dated
25/02/1429H (corresponding to 04/03/2008G) the capital of the Company was increased to SR 9,250,000,000 comprising 925,000,000 Shares with a nominal value of SR10 each through
the subscription by the Government of the Kingdom of Saudi Arabia represented by the PIF of a total of 62,500,000 shares and the offer of 462,500,000 Shares to the public.
This initial public offering (the "Offering”) of 462,500,000 Shares (collectively "Offer Shares” and each an “Offer Share”), representing in total 50% of the issued capital of the Company. The
price of each Offer Share shall be SR 20 (comprising a nominal value of SR10 and a premium of SR10 per Share). The Council of Ministers Resolution No. 72 dated 3/4/1427H provided that
the price of the Offer Shares should be determined by the mutual agreement of the Minister of Petroleum and Mineral Resources and the Minister of Finance (Chairman of the Board of the
Public Investment Fund), having regard to the financial position of Maaden as at the date of the Offering. On 16/11/1428H, the Minister of Petroleum and Mineral Resources and the Minister
of Finance, chairman of the Board of the Public Investment Fund agreed that the price of the Ma'aden Shares to be offered to the public will be SR 20, comprising a nominal value of SR10
and a premium of SR10.
Subscriptions under the Offering will be restricted to the following tranches:
Tranche (A) the General Organization for Social Insurance (“GOSI”) and the Public Pension Agency (“PPA”). At least 46,250,000 Offer Shares representing 10% of the Offer Shares will be
allocated to GOSI and the PPA, each subscripting to 5%.
Tranche (B) Institutional Investors ("Institutional Tranche"). This Tranche comprises a number of institutional investors (collectively referred to as “Institutional Investors”). The Institutional
Investors shall be selected from among the institutions approached by the Sole Bookrunner after consultation with the Company in accordance with standards previously specified by the
CMA. 124,875,000 Offer Shares representing 27% of the Offer Shares will be allocated to Institutional Investors. This allocation may be decreased down to 23,125,000 Offer Shares
(representing 5% of the Offer Shares), in the event that the number of Offer Shares allocated to Individual Subscribers is increased as described below.
Tranche (C) Individual Subscribers ("Retail Tranche"): includes Saudi individuals and Saudi women divorced or widowed having minor children from a non-Saudi husband who shall have the
right to subscribe in their names for her own benefit (referred to individually as “Individual Subscriber” and collectively as "Individual Subscribers”). 291,375,000 Shares will be allocated to
Individual Subscribers representing 63% of the Offer Shares. This allocation may be increased to 393,125,000 Shares (representing 85% of the Offer Shares).
Pursuant to the Offering, the Company shall issue 462,500,000 new Shares, representing 50% of the issued capital of the Company following completion of the Offering. The Government of
the Kingdom of Saudi Arabia (represented by the Public Investment Fund) shall hold the remaining 50% of the issued capital of the Company. The Company shall receive the subscription
proceeds which shall be used, after the deduction of the subscription costs, to finance the Company’s expansion projects (see “Use of Proceeds” section and “Financing and Costs of
Projects” section). This Offering has been fully underwritten (see “Underwriting” section).
The subscription period will commence on Saturday 02/07/1429H (corresponding to 05/07/2008G) and will remain open for a period of 10 days up to and including Monday 11/07/1429H
(corresponding to 14/07/2008G) (the “Subscription Period”) during which time subscription applications can be made through branches of any of the Receiving Banks identified on page 9.
Each Individual Subscriber must apply for a minimum of 25 Offer Shares and not more than the maximum of 5,000,000. Institutional Investors may subscribe for Offer Shares through the
Sole Bookrunner pursuant to a book building exercise to be conducted prior to the Retail Offering (see "Key Dates for Investors" section). Each Institutional Investor must apply for a
minimum of 500,000 Offer Shares. No maximum limit is applicable to Institutional Investors.
The Offer Shares comprised in the Retail Tranche shall be allocated in two stages. During the first stage at least 25 Shares shall be allocated to each Individual Subscriber. In the event that
there is additional demand from Individual Subscribers, during the second stage each Subscriber for 2,000 shares or less shall receive full allocation of his subscription provided that the total
allocated shares shall not exceed the total of the shares allocated to the Retail Tranche (291,375,000 shares). The remaining Offer Shares (if any) shall be allocated on a pro-rata basis to
the number of Offer Shares applied for by the Subscriber. In the event that there is additional demand from Individual Subscribers, the number of Offer Shares allocated to Individual
Subscribers may be increased by an amount of up to 101,750,000 shares resulting in a total allocation to the Retail Tranche of 393,125,000 shares representing 85% of the total Offer
Shares.
Excess subscription monies (if any) will be refunded to all Applicants (including Individual Subscribers and Institutional Investors) without any charge or withholding by the Receiving Banks.
Notification of the final allotment and refund of subscription monies (if any) will be made no later than on Sunday 17/07/1429H (corresponding to 20/07/2008G) (see “Subscription Terms and
Conditions – Allocation and Refund Policy” section).
The Company has one class of shares. Each Share entitles the holder to one vote and each shareholder has the right to attend and vote at the shareholders' general assembly meeting (the
"General Assembly"). The Offer Shares will be entitled to receive dividends declared by the Company for the financial year ending 31 December 2008 (see "Dividend Policy" section).
Prior to the Offering, there has been no public market for the Shares in Saudi Arabia or elsewhere. An application has been made to the CMA for the admission of the Shares to the Official
List and all relevant approvals pertaining to this Prospectus and all other supporting documents requested by the CMA in addition to all relevant regulatory approvals required to conduct the
Offering have been granted. Trading in the Shares is expected to commence on the Saudi Arabian Stock Exchange (the "Exchange") soon after the final allocation of the Shares (See "Key
Dates for Investors"section). Subsequent to the commencement of trading of the Shares, Saudi nationals, GCC nationals, foreign individuals resident in Saudi Arabia, as well as majority
Saudi or GCC owned companies, banks and Saudi and GCC investment funds will be permitted to trade in the Shares.
The "Important Notice" and "Risk Factors" sections in this Prospectus should be considered carefully prior to making an investment decision in the Offer Shares pursuant to this Prospectus.

Financial Advisor and Sole Bookrunner

Lead Underwriter and Lead Manager

Co-Underwriters

Receiving Banks

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This Prospectus includes information given in compliance with the Listing Rules of the Capital Market Authority of Saudi Arabia (the "CMA"). The Directors, whose names appear on page 4i,
jointly and severally, accept full responsibility for the accuracy of the information contained in this Prospectus and confirm, having made all reasonable enquiries, that to the best of their
knowledge and belief, there are no other facts the omission of which would make any statement herein misleading. The Authority and the Exchange take no responsibility for the contents of
this document, make no representations as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of
this document.
English Translation of the Official Arabic Prospectus This Prospectus is dated 20/6/1429H (corresponding to 24/6/2008G)
Important Notice
This Prospectus provides full details of information relating to the Company and the
Offer Shares. When applying for Offer Shares, investors will be treated as applying on
the basis of the information contained in the Prospectus, copies of which are available
for collection from the Receiving Banks or by visiting the Company's website,
www.maaden.com.sa, or the Authority's website, www.cma.org.sa.
JPMorgan Chase Bank N.A. - Riyadh Branch ("JPMorgan") has been appointed by the
Company to act as Financial Advisor and Sole Bookrunner in relation to the Offering
described herein.
This Prospectus includes details given in compliance with the Listing Rules of the Authority.
The Directors, whose names appear on page 4, jointly and individually, accept full
responsibility for the accuracy of the information contained in this Prospectus and confirm,
having made all reasonable enquiries, that to the best of their knowledge and belief, there are
no other facts the omission of which would make any statement herein misleading. The CMA
and the Exchange take no responsibility for the contents of this document, give no
assurances as to its accuracy or completeness, and expressly disclaim any liability
whatsoever for any loss arising from, or incurred in reliance upon, any part of this document.
Whilst the Company has made all reasonable enquiries as to the accuracy of the information
contained in this Prospectus as at the date hereof, substantial portions of the market and
industry information herein are derived from external sources. Whilst none of the Company,
its financial advisor or any other advisors have any reason to believe that the market and
industry information is materially inaccurate, such information has not been independently
verified by the Company and no representation is made with respect to the accuracy or
completeness of any of this information. However, the Company does take responsibility for
the accuracy of its own market and industry estimates.
The information contained in this Prospectus as at the date hereof is subject to change,
particularly because the actual financial state of the Company and the value of the Shares
may be adversely affected by future developments in inflation, interest rates, taxation, or other
economic, political and other factors including those described herein under "Risk Factors"
that may negatively affect the Company or any of its investments over which the Company
may have no control. Neither the delivery of this Prospectus nor any oral or written interaction
in relation to the Offer Shares is intended to be, or should be construed as or relied upon in
any way as, a promise or representation as to future earnings, results or events.
This Prospectus is not to be regarded as a recommendation on the part of the Company, the
Directors or any of their respective advisors to participate in the Offering. Moreover,
information provided in this Prospectus is of a general nature and has been prepared without
taking into account any potential investor's investment objectives, financial situation or
particular investment needs. Prior to making an investment decision, each recipient of this
Prospectus is responsible for obtaining independent professional advice in relation to the
Offering and for considering the appropriateness of the information herein, with regard to his
financial objectives, situations and needs.
This Offering is directed at: (1) GOSI and the PPA, (2) Institutional Investors approached by
the Sole Bookrunner, and (3) Saudi individuals and Saudi women divorced or widowed having
minor children from a non-Saudi husband who shall have the right to subscribe in their names
for her own benefit. The distribution of this Prospectus and the sale of the Offer Shares to any
other persons or in any other jurisdiction are expressly prohibited. The Company and the
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Financial Advisor ask the recipients of this Prospectus to identify these regulatory restrictions
and to abide by them.
Industry, Market and Valuation Data
The institutions that supplied information about the different sectors or provided specific
reports or studies are:
SRK Consulting (UK) Limited (“SRK”) is an international independent institution for consulting
that operates through 31 offices distributed across 6 continents. SRK is an associate
company of the international holding company, formed in 1974, SRK Global Limited which
offers mining project related services ranging from exploration through feasibility, mine
planning, and production to mine closure. The source for all market data contained in “Gold
MER” is SRK, which is the entity that prepared the report. Neither SRK Consulting nor any of
its affiliates, shareholders, directors or their relatives, hold any shareholding or interest of any
kind in the Company. SRK Consulting has given its written consent for the use of the Gold
MER in the manner and format set out in the Prospectus. Such consent has not been
withdrawn.
Behre Dolbear & Company Inc. (“Behre Dolbear”), founded in 1911, specializes in performing
studies and consulting for a wide range of businesses with interests in the minerals industry.
Behre Dolbear prepared the “Phosphate MER” and “Aluminium MER” which has performed
assignments around the world in relation to a broad range of commodities including base and
precious metals, coal and lignite, ferrous metals, uranium, industrial minerals and gemstones.
Neither Behre Dolbear nor any of its affiliates, shareholders, directors or their relatives, hold
any shareholding or interest of any kind in the Company. Behre Dolbear has given its written
consent for the use of the Phosphate MER and Aluminium MER in the manner and format set
out in the Prospectus. Such consent has not been withdrawn.
CRU Strategies Limited (“CRU”), founded in the late 1960s, is an independent business
analysis and consultancy group focused on the mining, metals, power, cables, fertilizer and
chemical sectors. The source for all of the market data contained in “The Phosphate Industry”
and the “The Aluminium Industry” is CRU which employs more than 200 experts in London,
Beijing, Santiago, Sydney and key centers within the United States. Neither CRU nor any of
its affiliates, shareholders, directors or their relatives, hold any shareholding or interest of any
kind in the Company. CRU has given its written consent for the use of its market data and
research in the manner and format set out in the Prospectus. Such consent has not been
withdrawn.
Brook Hunt & Associated Ltd (“Brook Hunt”), since 1975, has operated as a specialized
company analyzing mine, smelter and refinery production costs within the base and precious
metal industries. The source for all of the market data contained in “The Gold Industry” is
Brook Hunt. The information used in the “The Gold Industry” section has been derived from a
Brook Hunt report (gold industry in Saudi Arabia). Neither Brook Hunt nor any of its affiliates,
shareholders, directors or their relatives, hold any shareholding or interest of any kind in the
Company. Brook Hunt has given its written consent for the use of its market data and
research in the manner and format set out in the Prospectus Financial Information. Such
consent has not been withdrawn.
The general overviews of the Gold Industry, the Phosphate Industry and the Aluminium
Industry (set out in the "Industry Overview" section) were prepared in October 2007 and as
such address prevailing market conditions at that time and do not take account of any
changes in market conditions which may have occurred since. The overviews do not contain
any statistical information for 2007 and have not been updated prior to the date of this
Prospectus.
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Each of the Gold MER, Phosphate MER and Aluminium MER (set out in the "Mineral Expert
Reports" section) were prepared in or prior to November 2007 and as such address the
matters stated therein at that time or at the times otherwise specified and do not take account
of any changes or developments which may have occurred since. These reports have not
been updated prior to the date of this Prospectus.
Financial Information
The consolidated financial statements of the Company for the years ended 31 December
2007, 2006 and 2005 which have been audited by Deloitte & Touche – Bakr Abulkhair & Co.,
and in each case the notes thereto, which are incorporated elsewhere in this Prospectus,
have been prepared in conformity with the Saudi Organisation for Certified Public
Accountants ("SOCPA") Generally Accepted Accounting Principles. The Company reports its
financial statements in Saudi Arabian Riyals (“SR”).
Forecasts and Forward Looking Statements
Forecasts set forth in this Prospectus have been prepared on the basis of certain stated
assumptions. Future operating conditions may differ from the assumptions used and
consequently no representation or warranty is made with respect to the accuracy or
completeness of any of these forecasts.
Certain statements in this Prospectus constitute "forward-looking-statements". Such
statements can generally be identified by their use of forward-looking words such as "plans",
"intends", "estimates", "believes", "anticipates", "may", "will", "should", "expected", "would be",
"sees" or the negative or other variation of such terms or comparable terminology. These
forward-looking statements reflect the current views of the Company with respect to future
events, and are not a guarantee of future performance. Many factors could cause the actual
results, performance or achievements of the Company to be significantly different from any
future results, performance or achievements that may be expressed or implied by such
forward-looking statements. Some of the risks and factors that could have such an effect are
described in more detail in other sections of this Prospectus (See "Risk Factors" section).
Should any one or more of the risks or uncertainties materialise or any underlying
assumptions relied on prove to be inaccurate or incorrect, actual results may vary materially
from those described in this Prospectus as anticipated, believed, estimated, planned or
expected.
Subject to the requirements of the Listing Rules, the Company must submit a supplementary
prospectus to the Authority if at any time after the Prospectus has been approved by the
Authority and before admission of its shares to the Official List, the Company becomes aware
that: (a) there has been a significant change in essential matters contained in the Prospectus
or any document required by the Listing Rules, or (b) additional significant matters have
become known which would have been required to be included in the Prospectus. Except in
the two aforementioned circumstances, the Company does not intend to update or otherwise
revise any industry or market information or forward-looking statements in this Prospectus,
whether as a result of new information, future events or otherwise. As a result of these and
other risks, uncertainties and assumptions, the forward-looking events and circumstances
discussed in this Prospectus might not occur in the way the Company expects, or at all.
Prospective investors should consider all forward-looking statements in light of these
explanations and should not essentially rely on the forward-looking statements.
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Corporate Directory
Appointed Board of Directors
Name Position Nationality Age
H.E. Ali Ibrahim AI-Naimi Non-executive Chairman Saudi 72
H.R.H. Prince Faisal Bin Turki Bin Abdulaziz Non-executive Director Saudi 42
Dr. Mohammad Suliman AlJasr Non-executive Director Saudi 52
Dr. Abdulrahman A. Al-Jafary Non-executive Director Saudi 67
Dr. Ziad Al-Sudairy Non-executive Director Saudi 53
Dr. Abdulaziz, S. Al-Jarbou Non-executive Director Saudi 60
Mr. Abdullah A. AI-Zaid Non-executive Director Saudi 65
Dr. Zuhir AbdulHafiz Elnawab Non-executive Director Saudi 64
Dr. Abdallah E. Dabbagh Director and CEO Saudi 62
Source: Ma’aden
* Pursuant to the Royal Decree No. 32/A dated 13/02/1418H the currently appointed Board of Directors shall remain until
the first meeting of the general assembly to take place after the Offering (please review section “Corporate Structure – Board
of Directors” section).

Shareholders
Pre-Offering Post-Offering
Name Number of Number of
% Value in SR % Value in SR
Shares Shares
The Government
(represented by The Public 400,000,000 100% 4,000,000,000 462,500,000 50% 4,625,000,000
Investment Fund)
General Organization for
- - - 23,125,000 2.5% 231,250,000
Social Insurance
Public Pension Agency - - - 23,125,000 2.5% 231,250,000
Public* - - - 416,250,000 45% 4,162,500,000
Total 400,000,000 100% 4,000,000,000 925,000,000 100 9,250,000,000

* including the Individual Subscribers and Institutional Investors

Registered Office
The business address of the Company is:

Saudi Arabian Mining Company (Ma’aden)
P.O. Box 68861
Riyadh 11537
Building of the Ministry of Petroleum and Precious Metals
Al-Ma’ather Street
4
Kingdom of Saudi Arabia
Telephone: [phone]
Fax: [phone]

Authorised Representative
The Company’s Representative is Mr. Abdullah Al-Fallaj (Vice President – Financial Matters)

Board of Directors’ Secretary
Dr. Bakri Magzoub Mudathir
P.O. Box 68861
Riyadh, 11537
Kingdom of Saudi Arabia
Telephone: [phone]
Fax: [phone]
Share Registrar

Tadawul
Abraj Attuwenya
700 King Fahad Road
PO Box 60612
Riyadh 11555
Kingdom of Saudi Arabia
Ph: [phone]
Fax: [phone]

Advisors

Financial Advisor and Sole Bookrunner
__________________________________________________________________________

JPMorgan Chase Bank N.A. – Riyadh Branch
Al Faisaliah Office Tower – 8th Floor
P.O. Box 51907
Riyadh, 11553
Kingdom of Saudi Arabia
Telephone: [phone]
Fax: [phone]

Legal Advisors to the Transaction

__________________________________________________________________________
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Legal Advisors
Torki A. Al Shubaiki in association with Baker & McKenzie Limited
P.O. Box 4288
Riyadh 11491
Kingdom of Saudi Arabia
Telephone: [phone]
Fax: [phone]

Baker & McKenzie LLP
100 New Bridge Street
London EC4V 6JA
United Kingdom
Telephone: [phone]
Fax: [phone]
Registered Auditors and Reporting Accountants

__________________________________________________________________________

Deloitte & Touche Bakr Abulkhair & Co.
P.O. Box 213
Riyadh 11411
Kingdom of Saudi Arabia
Tel: [phone]
Fax: [phone]
Transaction Accounting Advisors
__________________________________________________________________________

KPMG Al Fozan & Al Sadhan
Building No. 7103
Al Ahsa Street, Malaz
P.O. Box 92876, Riyadh 11663
Kingdom of Saudi Arabia
Telephone: [phone]
Fax: [phone]

Market Studies Advisors And Mineral Experts
__________________________________________________________________________
B D
EHRE OLBEAR
Behre Dolbear Company (“Behre Dolbear)
Winchester House
Street 259-269 Old Marylebone Road
London, United Kingdom
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Telephone: [phone]
Fax: [phone]

SRK Consulting
Engineers and Scientists
SRK Consulting (UK) Limited (“SRK”)
5th floor, Churchill House
17 Churchill Way
City and County of Cardiff
CF10 2HH, Wales
United Kingdom
Telephone: [phone]
Fax: [phone]

CRU Strategies Limited (“CRU”)
31 Mount Pleasant
London, United Kingdom
Telephone: [phone]
Fax: [phone]

Brook Hunt & Associates Ltd
45 High Street, Addlestone
Surrey KT15 1TU
United Kingdom
Telephone: [phone]
Fax: [phone]

NOTE: As of the date of this Prospectus, the foregoing advisors and mineral experts
have given and not withdrawn their written consent to the use of their name and the
publication of their reports or overviews in this Prospectus. Moreover, the foregoing
advisors do not themselves, nor do any of their affiliates, employees or their relatives,
hold any shareholding or interest of any kind in the Company.

Lead Underwriter and Lead Manager
__________________________________________________________________________

Samba For Asset and Investment Management (Samba Capital)
Kingdom Centre
P.O. Box 220007,
Riyadh, 11311
Telephone: [phone]
Fax: [phone]

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Legal Advisors to the Underwriters
__________________________________________________________________________

Allen & Overy, LLC
Suite No. 101/202, second floor, Bawaba Village, Building No. 8
Dubai International Financial Centre
P.O. Box 506678, Dubai
United Arab Emirates
Tel: [phone]
Fax: [phone]

Principal Bankers of the Company
__________________________________________________________________________

Saudi British Bank
P.O. Box 9084,
Riyadh 11413,
Kingdom of Saudi Arabia
Telephone: [phone]
Fax: [phone]

Samba Financial Group
P.O. Box 833,
Riyadh 11421,
Kingdom of Saudi Arabia
Telephone: [phone]
Fax: [phone]

The Saudi Investment Bank
P.O. Box 3533,
Riyadh 11481,
Kingdom of Saudi Arabia
Telephone: [phone]
Fax: [phone]

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Receiving Banks
__________________________________________________________________________

Riyad Bank
Principal Office, P.O. Box 22622, Riyadh 11416,

Kingdom of Saudi Arabia
Telephone: [phone]; Fax: [phone]

Arab National Bank
Principal Office, P.O. Box 9802, Riyadh 11423,
Kingdom of Saudi Arabia
Telephone: [phone]; Fax: [phone]

Banque Saudi Fransi
Principal Office, P.O. Box 56006, Riyadh 11554,

Kingdom of Saudi Arabia
Telephone : [phone] ; Fax: [phone]

The Saudi British Bank (SABB)
Principal Office, P.O. Box 9084, Riyadh 11413, Kingdom

of Saudi Arabia
Telephone: [phone]; Fax: [phone]

The Saudi Investment Bank
Principal Office, P.O. Box 3533, Riyadh 11481, Kingdom
of Saudi Arabia
Telephone: [phone]; Fax: [phone]

The National Commercial Bank
Principal Office, P.O. Box 3555, Jeddah 21481, Kingdom

of Saudi Arabia
Telephone: [phone]; Fax: [phone]

Bank Al Bilad
Principal Office, P.O. Box 140, Riyadh 11411, Kingdom

of Saudi Arabia
Telephone: [phone]; Fax: [phone]

Bank Al Jazira
Principal Office, P.O. Box 6277, Jeddah 21442, Kingdom

of Saudi Arabia
Telephone: [phone]; Fax: [phone]

Saudi Hollandi Bank
Principal Office, P.O. Box 1467, Riyadh 11431, Kingdom

of Saudi Arabia
Telephone: [phone]; Fax: [phone]

Al Rajhi Bank
Principal Office, P.O. Box 28, Riyadh 11411, Kingdom of
Saudi Arabia
Telephone: [phone]; Fax: [phone]
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