FAQ

A public sukuk is offered broadly to investors and is typically listed on an exchange such as the Saudi Exchange (Tadawul), with the disclosure, regulatory approval, and secondary-market liquidity that a listing brings. A private sukuk is placed with a limited group of institutional or qualified investors without a public listing — usually faster to execute and more flexible in structure, but with a narrower investor base and less liquidity. The right route depends on an issuer’s size, funding need, timing, and targeted investor type.

Unlike a bank facility, which is typically a straightforward senior loan, a sukuk is a flexible capital-markets instrument that can be placed at different levels of a company’s capital structure and tailored to different investor needs. Beyond senior sukuk, it can be structured as subordinated, mezzanine, hybrid, convertible, or exchangeable — broadening the range of funding options. The structure is chosen to balance cost, risk, tenor, regulatory treatment, and investor appetite.

A company may explore debt restructuring when its existing obligations no longer fit its cash flows or business plan — for example, ahead of a refinancing, as facilities approach maturity, when covenants come under pressure, or when the capital structure needs to be realigned to support growth. Restructuring can involve renegotiating terms, extending maturities, or reshaping the mix of lenders and instruments, with the aim of restoring financial flexibility and stability.

The Tadawul Main Market is Saudi Arabia’s primary equity market, with higher listing requirements and typically larger, more established companies. Nomu – Parallel Market has lighter requirements, is open to qualified investors, and is designed for companies seeking faster access to a public listing and looking to strengthen their governance earlier. Companies sometimes use Nomu as a stepping stone, with the option to transfer to the Main Market as they grow.

A company can raise capital through a private placement — a sale of securities to selected institutional and qualified investors rather than to the public — at any stage before it goes public. Investor appetite for private placements is typically strong, particularly for a pre-IPO round: a placement made shortly before a planned listing that lets investors take a stake ahead of the IPO, often on attractive terms. For the company, it brings in growth capital, validates the equity story, and helps anchor demand and momentum going into the offering.

A dual listing is when a company lists its shares on two exchanges — for example, its home market and the Saudi Exchange (Tadawul) — broadening its investor base and access to capital. A Saudi Depositary Receipt (SDR) is a security traded on Tadawul that represents shares in a company listed elsewhere, giving Saudi investors access to that company without a direct cross-border trade. Both are routes for GCC, regional, and international listed companies to reach Saudi investors, and for the Saudi market to offer wider investment choice.

A special purpose acquisition company (SPAC) is a listed shell company that raises capital through an IPO in order to acquire a private company, giving that company a route to the public market. The Capital Market Authority (CMA) has recently approved SPACs in the Saudi market. Merchants Capital advises on SPAC transactions — including structuring, positioning, and the acquisition process — as part of its equity capital markets practice.

In a sell-side mandate, the adviser represents a company or its shareholders looking to sell, merge, or bring in an investor, and runs the process to reach the right counterparty on the best terms. In a buy-side mandate, the adviser represents an acquirer seeking to identify, approach, and negotiate a target. M&A advisory applies to both listed and unlisted companies, with the process tailored to each — including the additional disclosure and regulatory steps that apply when a listed company is involved.

A closed-bid (or confidential) sale is a private, invitation-only process in which a small number of pre-qualified buyers submit sealed bids, rather than the asset being marketed openly. It is used when confidentiality, control, and execution certainty matter — for example, in a sensitive asset disposal or ownership transition — allowing a seller to test the market and maximize value while limiting public exposure.

In corporate financing, a company borrows on the strength of its overall balance sheet. In project finance, funding is raised against the cash flows and assets of a specific project or asset — often through a dedicated special purpose vehicle, with lenders looking primarily to the project’s own economics. It is commonly used for real estate and infrastructure projects.