Saudi Ara­bia set for $11bn as­set-sale blitz after slow start

Muscat Daily - - BUSINESS -

Riyadh, Saudi Ara­bia - Saudi Ara­bia could be in for a busy year of as­set sales if the king­dom sticks to its plans. The gov­ern­ment hopes to gen­er­ate about US$11bn by 2020 through its pri­va­ti­za­tion pro­gram that in­cludes the sale of stakes in util­i­ties, soc­cer clubs, flour mills and med­i­cal fa­cil­i­ties. The sales are key to the coun­try’s ef­forts to wean the econ­omy off oil, but so far have been dogged by de­lays - most no­tably the ini­tial pub­lic of­fer­ing (IPO) of oil giant Aramco.

“With the cur­rent sta­tus of the ini­tia­tives and the progress the pri­va­ti­za­tion Su­per­vi­sory Com­mit­tees are mak­ing, we see these as at­tain­able tar­gets,” ac­cord­ing to the Na­tional Cen­ter for Pri­va­ti­za­tion (NCP) and PPP, which is re­spon­si­ble for most of the pri­va­ti­za­tions ex­pect cer­tain deals like Aramco and the stock ex­change. “Progress in most cases is go­ing ac­cord­ing to sched­ule.”

Saudi Ara­bia plans to com- plete the sale of four flour milling com­pa­nies and Sau­dia Med­i­cal Ser­vices fa­cil­i­ties this year.

Crown Prince Mo­hammed bin Sal­man told the world in 2016 that he meant busi­ness when an­nounc­ing the sale of shares in Aramco in what would be the world’s big­gest IPO. But it was pushed out from 2018 to late 2020 or early 2021 so the com­pany, known for­mally as Saudi Ara­bian Oil Co, could com­plete a deal to buy a US$70bn stake in the king­dom’s big­gest petro­chem­i­cal com­pany Sabic.

Plans to sell four flour milling com­pa­nies by Saudi Grains Or­ga­ni­za­tion this year will come three years after the idea was an­nounced, and well past the ini­tial tar­get of the end of 2016. Po­ten­tial buy­ers had un­til Novem­ber to sub­mit bid­ding qual­i­fi­ca­tion ap­pli­ca­tions.

The sale of the US$7.2bn Ras Al Khair power plant on the east coast is ex­pected to be done by 2020.

The king­dom's plans to pri­va­tize soc­cer clubs started in 2016. There are cur­rently no “ob­sta­cles” that could de­rail the time­line to sell the clubs by 2020, the NCP said. Turki al Al­shikh, for­mer head of the Saudi Sports Au­thor­ity, pre­dicted in June that the 16 clubs could raise US$800mn to US$1.5bn. The NCP spent the past year de­vel­op­ing the le­gal and com­mer­cial frame­work to cover the use of ad­ver­tis­ing, spon­sor­ship deals and broad­cast rights, it said.

The NCP said it will also open ten­ders for mu­nic­i­pal as­sets re­lated to com­mer­cial-land for de­vel­op­ment, re­new­able en­ergy PPP projects in so­lar and wind, park­ing cen­ters; a sec­ond cargo li­cense sta­tion at King Khalid In­ter­na­tional Air­port, the es­tab­lish­ment of an agri­cul­ture com­pany and a PPP for in­de­pen­dent schools, as well as school build­ings on a build-main­tain-trans­fer ba­sis.

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