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Saudi Arabia could experience a busy year of badet sales if the kingdom sticks to its plans.
The government hopes to generate about $ 11 billion by 2020 through its privatization program, which includes the sale of stakes in utilities, football clubs, flour mills and medical facilities. Sales are key to the country's efforts to lift the oil economy, but so far have been slowed down – particularly the IPO of oil giant Aramco.
"With the current state of the initiatives and the progress made by privatization oversight committees, we see them as achievable targets," according to the National Center for Privatization and Public-Private Partnerships (PPP), which is responsible for most of the expected privatizations of certain transactions like Aramco and the stock market. "In most cases, progress is proceeding according to schedule."
Saudi Arabia plans to finalize the sale of four flour mills and facilities Saudia Medical Services this year, according to the NCP.
The privatization process of the kingdom "has been one of the areas of the long-term reform program that has missed expectations and has done so many times," said Jean-Paul Pigat, head of the research at Lighthouse Research in Dubai. "Compared to last year, I do not think that macroeconomic conditions or financial market conditions in early 2019 suggest in any way an acceleration of privatizations."
Here is an overview of some of the biggest privatizations of the kingdom:
Saudi Aramco
In 2016, Crown Prince Mohammed bin Salman declared to the world that he was a businessman when he announced the sale of Aramco shares as part of what would be the most great IPO of the world. But it was postponed from 2018 to the end of 2020 or early 2021 for the company, officially known as Saudi Arabian Oil Co., to enter into an agreement to buy a $ 70 billion stake. dollars in the largest petrochemical company in the kingdom, Sabic.
stock Exchange
Tadawul, the largest stock exchange in the Middle East, unveiled plans for a public call for savings in 2014, hiring HSBC Holdings Plc as a financial advisor in 2016. It was to take place in 2018, but people familiar with the case said in April pushed back to this year at the earliest. It is in the hope that the inclusion of Saudi equities in the indices established by FTSE Russell and MSCI Inc. may increase the value of the company.
Riyadh Airport
Plans to sell a stake in King Khalid International Airport would have been put on hold in September. Saudi Civil Aviation Holding Co. is reported to have asked local and international investment banks in 2017 to apply for the role of adviser at the sale.
Flour mills
Saudi Grains Organization is planning to sell four flour milling companies this year three years after the announcement of the idea and well beyond the original target set for the end of 2016. Potential buyers had up to 30% of the time. In the month of November to submit their applications for qualification. HSBC Saudi Arabia gives its opinion on the transaction.
Power plant
The sale of the Ras Al Khair power station, worth $ 7.2 billion, on the east coast should be completed by 2020. BNP Paribas SA has been hired to give its opinion on the Operation in September 2017. The sale is part of a broader privatization strategy of Saline Water Conversion Co. by selling some of its badets and developing factories.
Soccer clubs
Privatization plans for football clubs began in 2016. There are currently no "hurdles" that could derail the club sales schedule by 2020, the NCP said. Turki Al Alshikh, former head of the Saudi Sports Authority, predicted in June that the 16 clubs could raise between $ 800 and $ 1.5 billion. Last year, the NCP developed a legal and commercial framework covering the use of advertising, sponsorship contracts and broadcast rights, he said.
To win
The NCP announced that it would also launch tender calls for municipal badets related to commercial land to be developed, PPP projects on renewable energy in the fields of solar and wind energy. , parking lots; a second cargo license station at King Khalid International Airport, the creation of a farm business and a PPP for independent schools, as well as school buildings built, maintained and transferred.
In the health sector, the NCP will also open PPP tenders in the areas of radiology, laboratories, hospital start-up and accommodation of health facility staff. The center is considering investing in public-private partnerships worth 28 billion riyals ($ 7.5 billion).
"The main objective is to launch bankable transactions that will be accepted by the market and attract the best operators and local and international investors," the NCP said. "Over the past 18 months, we have worked diligently to strengthen the legal and business base of these initiatives."
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