Riyadh airport deal represents key privatization test for Goldman Sachs
LONDON/RIYADH: Goldman Sachs has been appointed as a consultant on the sale of a stake in King Khaled International Airport in Riyadh, representing a key test of how the government plans to handle a $300 billion privatization program.
An airport spokesman told Makkah Daily that the investment bank would advise on the sale of a minority stake, but that it was too early to disclose details of the sale before a study was completed. The privatization of government assets such as airports is part of a wide-ranging program of reforms aimed at reducing economic dependence on oil and gas revenues.
Passenger traffic through the Riyadh airport ticked up 0.9 percent last year to 22.5 million. The government has already hired foreign firms to manage some of its airports including the Dublin Airport Authority, which last year won the contract to run Riyadh airport’s new Terminal 5.
Singapore’s Changi Airport Group won a contract to operate King Abdul Aziz International Airport in Jeddah for up to 20 years.
Goldman Sachs is well versed in the airport business, having been involved throughout the changes to British airport corporate structure.
So far, Goldman has not figured prominently on the lists of advisers to the Kingdom’s privatization process.
It has not been mentioned at all in the biggest prize, Saudi Aramco’s initial public offering (IPO). If it manages to succeed in this task, keeping the government and passengers happy, it could pick up a lot more of the huge program of state sell-offs.