* IPO to start April 28, targets local and foreign investors
* Follows strong interest in Aramco international bond issue
* To build 8 new malls within 4 years, 16 cinemas in 2 years (Adds Refinitiv data, context on Saudi market)
By Stephen Kalin
RIYADH, April 16 (Reuters) - Shopping mall operator Arabian Centres, owned by Fawaz Alhokair Group, will this month launch what could be Saudi Arabia's largest initial public offering (IPO) in five years, which it hopes will raise around $1 billion.
Arabian Centres said on Tuesday it will offer 95 million shares, representing 20 percent of the company, in what would be this year's first Saudi IPO as the kingdom tries to get past the fallout over last year's murder of journalist Jamal Khashoggi.
Riyadh has been encouraging more family-owned companies to list in a bid to deepen its capital markets as part of reforms aimed at reducing reliance on oil revenue.
The kingdom also wants to boost local entertainment and attract foreign visitors, though subsidy cuts and new taxes have eaten into household budgets.
The Arabian Centres IPO is planned to start around April 28, said Chief Executive Olivier Nougarou, and could raise "in the range of $1 billion, but it's very difficult to confirm..."
That would make it Saudi Arabia's biggest IPO since National Commercial Bank raised $6 billion in 2014, Refinitiv data shows.
Up to 10 percent of the offering would be allocated to retail investors, with the remaining offered to institutional investors locally and abroad, Nougarou said.
The prospectus will be delivered in a few days, he added.
"There is a strong interest from investors right now for Saudi Arabia," Nougarou told reporters. "If you look at the retail landscape in Saudi Arabia, there is a lot to do, there is strong potential and that's what investors are believing."
Heightened criticism of Riyadh's rights record following Khashoggi's killing led several international firms to pull out, though others investors have pushed ahead with deals.
The Saudi index has gained over 16 percent so far this year, making it one of the Gulf's best performing markets in 2019, fuelled by an increase in foreign fund flows as it entered the FTSE Russell's emerging market index last month.
Meanwhile, Saudi Aramco is set to raise $12 billion with its first international bond issue after receiving more than $100 billion in orders, the latest sign of recovery.
Arabian Centres, which has 19 malls across 10 cities in the kingdom, plans to increase that to 27 within four years, including four in the next 12 months, Nougarou said.
Four cinemas are already under construction, with 12 more to come over the next two years, he added. A decades-long ban on movie theatres was lifted last year.
Fawaz Alhokair, a major shareholder in Fawaz Alhokair Group, was detained in an anti-graft probe by Saudi authorities under which dozens of senior officials and businessmen were held at Riyadh's Ritz Carlton Hotel in late 2017.
Many, including Alhokair, were released after being cleared or reaching settlements with the government.
Morgan Stanley, Samba Capital, NCB Capital, and Goldman Sachs are the joint financial advisers and bookrunners for the IPO. Other bookrunners include EFG Hermes KSA, Citigroup, Emirates NBD Capital, Credit Suisse, and Natixis. (Editing by Sherry Jacob-Phillips and Alexander Smith)