Kingdom Holding, the investment company of the Saudi billionaire Prince Al Waleed bin Talal bin Abdul Aziz Al Saud, has relinquished its controlling stake in Fairmont Raffles Hotels International, the luxury hotel chain. The investment company said yesterday that Voyager Partners, a private investment company that is an affiliate of Qatari Diar, had acquired a 40 per cent shareholding in Fairmont Raffles in a US$847 million (Dh3.11 billion) deal.
Kingdom Holding has issued more shares for the arrangement. "Our investment stays the same," said Shadi Sanbar, the chief financial officer at Kingdom Holding. "We're not selling. The shares we have, we keep. We have a new investor that comes in and the company issues more shares so our percentage goes down." In addition, Qatari Diar Hotel and Property Investment will provide Fairmont Raffles with a number of future management contracts for hotels that will be branded Fairmont, Raffles or Swissotel, Kingdom Holding said.
"They would have bought hotels and ended up with 10 or 12 different brands," said Mr Sanbar. "However, now the strategy is they buy a hotel with a view to converting it to a Raffles or a Fairmont." Kingdom Holding's stake in the Canada-based Fairmont Raffles has dropped to 35 per cent from 58 per cent, it said in a statement to the Saudi bourse. "As a result of these agreements, Kingdom Holding Company will become the second-largest shareholder in Fairmont Raffles, and Colony Capital will become Fairmont's third-largest shareholder." Qatari Diar, which is controlled by the Qatar Investment Authority, the sovereign wealth fund which bought into the German car maker Porsche last year, will become the biggest shareholder in the hotel company. "Qatari Diar is an excellent candidate to spearhead the development of this unique collection of brands and take it to the next stage, especially in an era of tighter financing environment," said Chiheb Ben Mahmoud at Jones Lang LaSalle Hotels.