Saudi Arabia poised for $11b asset-sale blitz
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.