May 27, 2019 / 9:20 AM / 6 months ago

Saudi Arabia's Napco National plans float, picks Saudi Fransi to advise-sources

DUBAI/RIYADH, May 27 (Reuters) - Saudi Arabia-based home disposables manufacturer Napco National is planning a potential public share sale and has hired the investment banking arm of Banque Saudi Fransi to advise on the deal, sources told Reuters.

Based in Dammam, Napco National produces paper and hygiene products like facial tissues, feminine napkins and adult and child diapers.

The company is working with Saudi Fransi Capital on an initial public offering (IPO) that could take place at the end of this year or next, said the sources who declined to be named due to commercial sensitivities.

One of the sources said it was still too early to assess the size of the offering.

Napco National and Saudi Fransi Capital did not immediately respond to requests for comment.

Founded in 1956, NAPCO National employs more than 5,200 people in Dammam, Jeddah and Riyadh, according to information on its website.

The company has disclosed no details of its sales or profits. It is part of Lebanon-headquartered INDEVCO, which has 38 plants and commercial companies in the Middle East, Africa, Europe and the United States, according to its website.

Saudi Arabia has been encouraging more companies to list in a bid to deepen its capital markets as part of reforms aimed at reducing its reliance on oil revenue.

The Saudi stock market is up more than 6% so far this year, one of the strongest performances in the Middle East, as it entered global emerging market benchmarks such as the FTSE Russell emerging market index.

The IPO market in the Gulf has revived this year with three sizable companies from Saudi Arabia and the United Arab Emirates (UAE) going public.

Saudi Arabian mall operator Arabian Centres listed on Riyadh’s Tadawul exchange earlier this month, becoming the kingdom’s first IPO under Rule 144a, which allows the sale of securities primarily to qualified institutional buyers in the United States.

UAE Payments and foreign exchange company Finablr raised $400 million in an IPO on the London Stock Exchange, also earlier this month.

Last month Dubai-based Network International covered its books on the first day of a share sale which valued the company at up to $3 billion ahead of its London listing.

$1 = 3.7499 riyals Reporting by Hadeel Al Sayegh in Dubai and Marwa Rashad in Riyadh Editing by David Holmes

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