A pedestrian walks past a Four Seasons Hotel in New York City (file). Saudi billionaire Prince Alwaleed bin Talal, the world’s 22nd richest man, according to data compiled by Bloomberg, holds a 95% stake in the Four Seasons chain with Bill Gates.
Bloomberg/Dubai
Kingdom Holding Co, the investment company owned by Saudi billionaire Prince Alwaleed bin Talal, is planning to sell shares in a “significant” number of assets.
The firm, through which Prince Alwaleed holds stakes in companies including Citigroup Inc and Twitter Inc, is considering offerings on the Saudi stock exchange and internationally, chief financial officer Mohammed Fahmy said in an interview in Riyadh. Flynas, the Saudi budget airline in which it holds a 34% stake, is among companies planning share sales, he said, declining to identify others.
“A significant number of our privately held assets are planning listings starting from 2016 to 2018,” Fahmy said. “The economic cycle will still be positive and those assets we have invested for a long time will have reached critical mass in terms of profitability and size.”
He didn’t elaborate on the number of assets under consideration for share sales.
Kingdom Holding, which owns half of the Savoy hotel in London and is backing a project to build the world’s tallest tower in Jeddah, took an early interest in Twitter and Beijing-based online retailer JD.com Inc. Those investments have yielded an internal rate of return of more than 30% and 75% respectively since they went public in the US last year, Fahmy said.
Alwaleed is considering an initial public offering or merger of Four Seasons Holdings Inc and Fairmont Hotels & Resorts Inc, he told Bloomberg TV in November 2013. The prince, the world’s 22nd richest man, according to data compiled by Bloomberg, holds a 95% stake in the Four Seasons chain with Bill Gates.
Fahmy, previously deputy CFO, took over in late 2013 from Shadi Sanbar, who retired after more than eight years with the company. Sanbar still serves as a financial adviser to Alwaleed.
In his first year as CFO, Fahmy renegotiated Kingdom Holding’s borrowing in a bid to cut interest costs. The efforts will save it almost $15mn a year in interest expenses on $2.4bn of debt, he said. In addition to cutting interest costs, Fahmy has also extended the maturity of the company’s loans. Over half of its debt, obtained from banks including Citigroup, Deutsche Bank AG, Bank of America Corp, Samba and Abu Dhabi Commercial Bank, now matures after 2018.
“We realised last year that given the strength of our balance sheet and the interest rate environment that there was a unique opportunity to lock in low funding costs for the next few years,” he said.
Low interest rates and high levels of liquidity at the regional banks have encouraged borrowers from Saudi Arabia to the UAE to renegotiate loans. Emaar Properties cut borrowing costs on a $500mn syndicated loan by more than a third, two people with knowledge of the matter said earlier this month, while Dubai Duty Free cut the pricing of a $1.75bn loan for a second time last August.
Kingdom Holding reported a 15% increase in profit for the last quarter after the value of its investments rose and financial costs declined. Profit for the quarter was 266mn riyals ($71mn). The shares gained as much as 4.4% in Riyadh yesterday.
Kingdom Holding, which has $1bn in bank financing available for new investments, is hunting opportunities worldwide in retail, pharmaceuticals and fast-moving consumer goods, which includes soft drinks and toiletries, Fahmy said. Africa, in particular, is on its radar this year.
