What is Private Placement?
A private placement is the sale of securities to a limited number of pre-selected investors rather than to the public. It avoids the cost and disclosure burden of a full public offering.
How It Works
- Identify accredited or institutional investors.
- Negotiate terms and price privately.
- Issue securities under the relevant exemption from public-offering rules.
Saudi Context
The Saudi CMA’s Rules on the Offer of Securities and Continuing Obligations regulate private placements, including caps on the number of offerees and minimum subscription sizes.
Example
A Saudi fintech raises SAR 80 million in a Series B private placement to PIF, STV, and Sanabil, avoiding a Tadawul listing at this stage.