Saudi Arabia said to consider sale of stake in Riyadh airport

 02 Jul 2017 - 23:24

Saudi Arabia said to consider sale of stake in Riyadh airport
Saudis rest at Riyadh airport March 10, 2009. REUTERS/Fahad Shadeed

By Matthew Martin and Deena Kamel Yousef / Bloomberg

Saudi Arabia is considering a plan to sell a stake in Riyadh airport, three people with knowledge of the matter said, as it embarks on a plan to raise billions of dollars through privatizations.

Saudi Civil Aviation Holding Co. has asked local and international investment banks to pitch for the role of adviser on the sale of a significant minority stake in King Khalid International Airport, the people said, asking not to be identified because the information is private. An adviser could be appointed before the end of July and the government wants the sale to be completed by early next year, the people said.

The size of the airport stake, how much could be raised and whether the sale will actually go ahead have yet to be finally decided, the people said. The appointment of an adviser doesn’t guarantee a sale will go ahead as the process is still in the early stages, one person said. Potential investors could include private-equity firms, infrastructure funds and international airport operators, said two of the people.

A slump in the price of crude has led Saudi Arabia to embark on an effort to wean the economy off oil known as Vision 2030 and spearheaded by the king’s son and heir, Mohammed bin Salman. The plan includes privatizations of state-owned Saudi Arabian Oil Co., or Saudi Aramco, the stock exchange and soccer clubs as well as efforts to cut government spending.

Boosting investment in the kingdom’s aviation industry, which has been dwarfed by competitors in Dubai and Qatar, is also part of the strategy. Ownership of the airports will be transferred to the sovereign wealth fund while they’re prepared to be privatized, Saudi Civil Aviation Holding Chairman Faisal Al-Sugair told Bloomberg in April.