Saudi Ara­bia poised for $11b as­set-sale blitz

Gulf News - - Business -

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 $11 bil­lion (Dh40.39 bil­lion) by 2020 through its pri­vati­sa­tion pro­gramme, which in­cludes the sale of stakes in util­i­ties, foot­ball clubs, flour mills and med­i­cal fa­cil­i­ties.

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

Here’s a look at where some of the king­dom’s big­gest pri­vati­sa­tion are up to:

■ Saudi Aramco: Crown Prince Mo­ham­mad 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 could com­plete a deal to buy a $70 bil­lion stake in the king­dom’s big­gest petro­chem­i­cal com­pany Sabic.

■ Stock ex­change: Tadawul, the Mid­dle East’s largest stock ex­change, un­veiled plans for a pub­lic of­fer­ing in 2014, hir­ing HSBC Hold­ings Plc as fi­nan­cial ad­viser in 2016. It was meant to take place in 2018, but sources said in April that it’s been pushed back to this year at the ear­li­est.

■ Riyadh air­port: Plans to sell a stake in King Khalid In­ter­na­tional Air­port were said in Septem­ber to have been put on hold. The Saudi Civil Avi­a­tion Hold­ing Co. was said to have asked lo­cal and in­ter­na­tional in­vest­ment banks in 2017 to pitch for the role of ad­viser on the sale.

■ Flour mills: Plans to sell four flour milling com­pa­nies by Saudi Grains Or­gan­i­sa­tion 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.

■ Power plant: The sale of the $7.2 bil­lion Ras Al Khair power plant on the east coast is ex­pected to be done by 2020. BNP Paribas was hired to ad­vise on the deal in Septem­ber 2017. The sale is part of a broader strat­egy to pri­va­tise Sa­line Wa­ter Con­ver­sion Co. by sell­ing some of its as­sets and de­vel­op­ing plants.

■ Foot­ball clubs: Plans to pri­va­tise foot­ball 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 Al Shaikh, for­mer head of the Saudi Sports Au­thor­ity, pre­dicted in June that the 16 clubs could raise $800 mil­lion to $1.5 bil­lion.

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