Saudi Steel Pipes Co said it has halved its stake in a planned plant, few days before it launches an initial public offering to raise 400 million riyals ($106.7 million).

New shareholders have joined the 485 million riyals plant project, which is set to start production in 2012, the company said in a note on the website of the regulator Capital Market Authority.

"The share of the company in the project will decline from 50 to 25 percent. As a result, the proportion of the IPO proceeds that will finance the project will decrease from 25-30 percent to 15-20 percent," it said.

In a listing prospectus published earlier on the website, Saudi Pipes said none of the proceeds from the June 27-July 3 share sale would go to founding shareholders.

Between 55 and 75 percent of the proceeds would fund planned expansion, including the pipe plant.

Tuesday's note also meant that up to 45 percent of the IPO proceeds could fund buying land, adding fixed assets, funding future expansion plans or possible takeovers of other plants instead of a maximum 35 percent based on the listing prospectus.

The company will offer 16 million new shares at 25 riyals each, and raise paid-up capital to 510 million riyals from 350 million riyals.

The firm's net profit rose to 141.2 million riyals in 2008 from 123.8 million riyals in 2007 and 72.1 million riyals in 2006.

Founded 1980, Saudi Steel Pipes caters mainly to state oil firm Saudi Aramco. - Reuters