Source: Zawya
ERAM Holdings is a Riyadh, Saudi Arabia-based private company that wants to raise cash by going to the debt market before the end of the year. The company is now in contact with banks/investors to determine the best course of action.
ERAM recently received a global credit rating of B+ and a Saudi national rating of BB+ from S&P Global Ratings. These strong ratings should help the company earn investor confidence and make it easier to raise the necessary funds in bonds or sukuk (Islamic bonds).
“Very few companies hold the B+ and BB+ Saudi national credit rating. Long term we are looking at what kind of instruments we can use in the global and regional markets,” ERAM’s Director of Corporate Development & Partnerships, Sarfraz Mohamed told Zawya.
Commercial and Expansion Strategies
ERAM works in many vital areas such as oil and gas, healthcare, tourism, manufacturing and technical services. ERAM predominately runs businesses in five areas. It is looking to use the funds raised for growth primarily in the health care, manufacturing, and R&D sectors.
The company has already made investments into a power electronics factory in Saudi Arabia – the first such factory in the Gulf – and has also opened a research center in Bangalore, India in order to support product development.
Aiming for Higher Growth
According to Sarfraz Mohamed, Director of Corporate Development & Partnerships at ERAM, “By the end of 2025, perhaps sooner, we should make some announcements and moves towards the debt capital markets,” he said.
S&P Global believes that ERAM is in a position to grow revenues from between 12% and 16% in 2025, to a forecasted range from 24% to 28% by 2026. Its profits are expected to increase significantly and its debts remain relatively low thus making it an attractive investment.
IPO Under Consideration
Mohamed also shared that “While an IPO is under consideration, it is not imminent,”
The company wants to grow by 15% in 2025, and more in 2026.
“We have already made some capex investments in the manufacturing, R&D facilities, and we have future plans of expansion aligned with vision 2030 mandates and that’s one of the major reasons why we are looking at the debt markets” ,he said
ERAM Holdings Overview
ERAM is helmed by Chairman and Managing Director Dr. Siddeek Ahamed. The group employs more than 11,000 people, with offices in India and the UAE.
ERAM expanding into the debt market is expected to facilitate their growth and provide a guideline for other private companies in Saudi Arabia pursuing funds through the capital markets.
