Kew Soda Ltd, better known as WE Soda, on Wednesday confirmed it will list on London’s Main Market, after the soda ash producer received ‘considerable interest’ from possible investors.
The company, which this time last week said it was mulling an initial public offering in London, said the final offer price and the maximum number of shares to be sold in the offer will be determined following a book-building process. WE Soda did not provide a date for its listing.
It expects indirect net proceeds to the company of the initial public offering to be around $800 million, with around $500 million to be used to pay down debt, and $300 million for general corporate purposes.
Following admission, it will target a free float of at least 10%, with a further 15% of the offer to be made available in an over-allotment option.
‘We have received considerable interest from potential investors, giving us the confidence to confirm our intention to undertake an IPO of our company on the London Stock Exchange,’ Chief Executive Alasdair Warren said.
‘We believe that all these factors together make for a compelling investment proposition, and I look forward to the next stage of our development as a listed company.’
WE Soda is the world’s largest natural soda ash producer. Based in London with production facilities in Turkey, the company manufactured 5.0 million metric tonnes of product last year, including 4.6 million metric tonnes of the alkali salt ingredient.
Soda is ash an ingredient used for glass manufacturing, but also in solar photovoltaic glass, the production of lithium carbonate used in electric vehicle batteries, and silicates and other sodium chemicals.
WE Soda said it plans to distribute ‘robust’ dividends. Following admission, it plans to pay out 100% of its excess cash, which it defines as funds leftover after maintenance and expansionary capital expenditures, taxes and debt service and a ‘minimum’ liquidity position of at least $100 million.
‘We plan to adopt a progressive dividend policy, aiming to maintain or grow the dividend each year, but, recognizing that some fluctuations in our excess cash are to be expected, actual dividend distributions will reflect the board’s view of our cash generation prospects and expected cash requirements at the time,’ WE Soda said.
Should its float occur, it plans to distribute an initial interim dividend of $0.0813 per share, $250 million in total. It means all shareholders will receive a payout ‘as if they had been a shareholder throughout the first half of the year’.
Once it announces its full-year results for 2023, it plans a final dividend on or around May 24 next year.
‘It is expected that the final dividend for YE 2023 will be equal to the unpaid portion of the dividend for the full year, consistent with our dividend policy, and is expected to be equal to or greater than the initial interim dividend paid in October 2023,’ WE Soda said.
The company, though UK headquartered, is owned by Turkish industrial firm Ciner Group.
WE Soda’s IPO announcement will provide a boost to the City, which has recently seen high-profile names like Arm Ltd and CRH PLC turn to New York.
In March, Arm - the Cambridge, England-based computer chip designer, owned by Japan’s SoftBank Group Corp - said it had ruled out a UK listing this year. Arm’s announcement was a blow to the UK government, which had been courting the firm to try and secure a London listing.
Dublin-based building materials firm CRH in March said it plans to move its primary stock listing to the US from London. Plumbing and heating products supplier Ferguson PLC made a similar move, while miner BHP Group Ltd has also moved its own primary listing, turning to Sydney.
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