Gulf Steel Works Factory Company Bidding Guidelines

Transcription

1 Gulf Steel Works Factory Company Bidding Guidelines

2 From: Saudi Fransi Capital P.O. Box Riyadh To: Qualified Investors Date: 27 November, 2017 Subject: Qualified Investor Bidding Guidelines in connection with the initial offering of shares in Gulf Steel Works Factory Company (the Issuer ) in the Parallel Market Dear Sirs, Reference is made to: (a) (b) (c) The attached Subscription/Bid Form and the terms and conditions attached thereto (the Terms and Conditions ). Unless otherwise defined in this letter, any defined term shall have the meaning given to such term in the Terms and Conditions; The offer of 6,000,000 shares in connection with the initial offering (the Qualified Offer ); and Your potential participation by placing bids in the Qualified Offer. In accordance with the regulations of the Capital Market Authority (the CMA ), you are kindly requested to take into consideration the information set out in this letter prior to placing your bid. 1. NATURE OF QUALIFIED APPLICANTS Qualified Applicants that are eligible to place bids in the initial offering must fall under one of the following categories (the Eligible Qualified Investor ): 1. Authorized persons acting for their own account; 2. Clients of an Authorized Person authorized to conduct managing activities provided that this Authorized Person has been appointed as an investment manager on terms which enable it to make decisions concerning the acceptance of an offer and investment in the Parallel Market on the client s behalf without obtaining prior approval from the client; 3. the Government of the Kingdom, any government body, any supranational authority recognized by the CMA or the Exchange, and any other stock exchange recognized by the CMA or the Securities Depository Center; 4. Government-owned companies, whether investing directly or through a portfolio managed by a person authorized to carry out managing activities; 5. Companies and funds established in a member state of the GCC; 6. Investment funds; 7. Qualified foreign investors; 8. Any other legal persons allowed to open an investment account in the Kingdom and an account at the Depository Centre; 9. Any natural persons allowed to open an investment account in the Kingdom and an account at the Depository Centre and fulfill any of the following criteria: a) has conducted transactions in security markets of not less than 40 million Saudi riyals in total, and not less than ten transactions in each quarter during the last twelve months; b) the average size of his securities portfolio shall exceed 10 million Saudi riyals during the last twelve months, or c) holds the General Securities Qualification Certificate which is recognised by the CMA. 10. Any other persons prescribed by the CMA. Any person who does do not fall under any of the above listed categories will not be considered an Eligible Qualified Investor and may not participate in the offer.

3 2. BID TABLE Acceptance of bids placed in the Bid Table will be subject to the following rules: (a) No accumulation rule: Each bid placed against its respective price will not accumulate to bids placed at lower prices (see Example A). Offering Price set as this level Price (SAR) Example A (Bid Table) Number of Offer Shares Total Offer Price (Price x Number of Shares) 21 2,000,000 42,000, ,900,000 41,800, ,800,000 41,400, ,700,000 40,800, ,600,000 40,000, ,500,000 39,000, ,400,000 37,800,000 Accepted Bid: 1,600,000 Shares Funds required to be transferred: SAR 40,000,000 b) Blank bids rule: It is recommended that a Qualified Applicant completes the entire Bid Table in accordance with his/her investment appetite at each price level. If no bid is placed at a particular price level, this will be considered as a bid for no shares. Therefore if the offering price is set at a higher level than the maximum price against which a Qualified Applicant has placed his/her bid then such an Applicant will be allocated no shares (see Example B). IPO Price set at this level Price (SAR) Example B (Bid Table) Number of Offer Shares Total Offer Price (Price x Number of Shares) 21 2,000,000 42,000, ,900,000 41,800, ,800,000 41,400, ,700,000 40,800, Accepted Bid: Nil Shares Funds required to be transferred: Nil In addition, if a bid is made above the offering price, then even if no bids were placed at any of the lower price levels, the bid will be accepted as per the highest bid value (see Example C).

4 IPO Price set at this level Price (SAR) Example C (Bid Table) Number of Offer Shares Total Offer Price (Price x Number of Shares) ,000 13,000, ,000 10,800,000 Implied Accepted Bid: 500,000 shares based on highest value bid i.e. bid value of SAR 12,500,000 at SAR 25 per share Funds required to be transferred: SAR 12,500, ALLOCATION OF SHARES AND FUNDING Bids will be accepted as explained above. As indicated in the Subscription/Bid Form, bids can be submitted (this means a completed, signed, stamped, and dated Bid Form together with the relevant supporting documents) electronically to GSW@fransicapital.com.sa, no later than 1:00 p.m. (Saudi time) on 18/12/2017G, followed by submitting a hard copy of the same forthwith (and in any event no later than 2:00 p.m. (Saudi time) on 21/12/2017G) to the attention of Mohammed AlHassan at the following addresses: - Within Riyadh to: Saudi Fransi Capital, 4th Floor Legend Tower, King Fahad Rd, - Outside Riyadh to: Saudi Fransi Capital, P.O. Box 23454, Riyadh 11426, Kingdom of Saudi Arabia. Failure to comply with this requirement shall result in the rejection of the bid and subscription made by the relevant Applicant. Eligible Qualified Investors with accepted bids will be sent an allocation notification (the Allocation Notification ) setting out: (a) The share price of the Initial Offering; (b) The bid value of the Offer Shares; and (c) The number of allocated Offer Shares The Eligible Qualified Investors will then be required to fill and finalize the Subscription Form in accordance with the Allocation Notification and shall submit an electronic copy to GSW@fransicapital.com.sa along with a hard copy to the attention of Mohammed AlHassan at the same addresses mentioned above, by no later than 4:00 p.m. (Riyadh time) on 28/12/2017G. Applicants will be required to transfer funds against their accepted bids no later than 1:00 p.m. (Riyadh time) on 02/01/2017G. 4. BIDDING AND COMPLIANCE WITH THE CMA REGULATIONS (a) Saudi Government entities and companies fully owned by the Government At the time of bidding, a Saudi Government entity and any company fully owned by the Government should ensure: 1. it is compliant with any applicable regulations and internal guidelines in relation to investing in Initial Offerings; 2. it has the authority and required approvals to invest in publicly listed companies on Tadawul including companies undertaking an Initial Offering; and 3. it has an active investment portfolio with the Tadawul. (b) Public Investment Funds At the time of bidding, all public and private investment funds should abide by the CMA regulations including the investment restrictions set out in the Investment Funds Regulations ( IFR ). In addition, public funds must comply with the following: 1. The bid amount submitted by the public fund and all other public funds with the same fund manager shall not exceed (25%) of the total offering by value. 2. The public fund shall not submit a bid with an amount in excess of (10%) of the total offering by value.

5 3. The public fund shall not submit a bid with an amount that exceeds (10%) of its net asset value in the offered shares. 4. Public funds are exempted from paragraph (3) above, if the public funds terms and conditions and information memorandum state an investment objective of investing in a specific investable universe which is a sub-category of the issuers listed on the Exchange provided that such investment does not exceed the market capitalization of the issuer expressed as a percentage of the investable universe. 5. The public fund must disclose in the bid form, the market capitalization of the investable universe of the public fund as of the end of the previous day of submitting the bid form. If the minimum bid requirement of 500 shares (the Minimum Bid ) would result in violating the investment restrictions under the IFR, Investment Funds may bid below the Minimum Bid. (c) Authorized Persons: At the time of bidding, Authorized Persons should be in compliance with the capital adequacy requirements imposed by the CMA. (d) Clients of an authorized person: At the time of bidding, their investment portfolios on the Tadawul should be in compliance with the portfolio s investment criteria. And to provide that: 1. The authorized person has been appointed on terms which enable it to make decisions concerning the acceptance of the participation in the offering and investing in the exchange on the client s behalf without reference to the client. 2. The participation in Book building shall be directed through the authorized person, and all related communication are made through the authorized person. (e) QFIs and GCC Corporate Investors QFIs and GCC corporate investors should provide copies of the registration notification letter issued by the CMA to them. (f) Other Qualified Investors All other Institutional Investors should satisfy the bidding requirements set forth in the prospectus and the Bid Form issued by Saudi Fransi Capital. 5. BIDDING RESTRICTIONS The Qualified Applicant represents and warrants to the Issuer, the Selling Shareholders and Saudi Fransi Capital that it: (a) (b) will not submit multiple bids through different investment vehicles (all such bids will be rejected); has taken reasonable steps to ensure that its affiliates shall not place any bids; (c) shall not place a bid for such number of the Offer Shares that is equal to or in excess of five (5%) percent (or 1,000,000 Shares) of the share capital of the Issuer; (d) (e) does not own, legally or beneficially, any shares in the Issuer; and is not a related party to a person who owns, legally or beneficially, any share in the Issuer. For the purpose of this paragraph 5: The terms related party and person shall have the meanings given to them under the Glossary of Defined Terms Used in the Regulations and Rules of the CMA issued by the Board of the CMA pursuant to Resolution Number dated 20/8/1425H (corresponding to 4/10/2004G), as amended. The term affiliate shall mean a person who controls another person or is controlled by that other person, or who is under common control with that person by a third person; and The term control shall mean the ability to influence the actions or decisions of another person, whether directly or indirectly alone or with a relative or an affiliate : (i) holding thirty percent (30%) or more of the voting rights in a company, or (ii) having the right to appoint thirty percent (30%) or more of the members of the governing body. 6. ALLOCATION METHOD The Financial Advisor will, at its discretion allocate the Offer Shares to the Qualified Investors in coordination with the Issuer by utilizing the discretionary allocation mechanism.

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