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Abu Dhabi, UAEMonday 10 December 2018

Exclusive: Saudi Arabia’s Ground Handling Logistics hires banks for IPO in 2019

Airport services provider to raise more than 1bn Saudi riyals by floating 30% of shares on Tadawul

Ground Handling Logistics’ plan for an IPO follows the listing of Saudi Ground Services, a unit of Saudi Arabian Airlines. EPA
Ground Handling Logistics’ plan for an IPO follows the listing of Saudi Ground Services, a unit of Saudi Arabian Airlines. EPA

Saudi Arabia’s Ground Handling Logistics, a Riyadh-based airport services provider, is seeking to raise more than 1 billion Saudi riyals (Dh979 million) by floating 30 per cent of its shares on the kingdom's Tadawul exchange by next year.

The company has appointed banks including Al Ahli Bank, Alinma Investment Bank and Riyad Bank to help manage its initial public offering, Maher Al Nahdi, chief executive of Ground Handling Logistics, told The National on the sidelines of an airports exhibition in Dubai on Monday. “We will IPO by the third quarter of 2019,” he said. “The proceeds will be invested in the company, we will be expanding outside of Saudi Arabia.”

The world’s top oil exporter plans to raise up to $11bn in non-oil revenues from the privatisation of some state-owned assets by 2020, it said last month. The government has said it aims to raise as much as $200bn from the privatisation drive in the coming years as part of its Vision 2030 agenda to reform the economy. Within the aviation sector, the authorities have said the country’s airports will be corporatised, or turned into private companies in 2018 and that privatisation will follow later.

Ground Handling Logistics’ plan for an IPO follows the listing of Saudi Ground Services, a unit of Saudi Arabian Airlines, on the Tadawul in 2015. The kingdom’s aviation sector is expected to drive economic growth and diversification as the country invests in improving airport infrastructure and awards new airline licences to cater to its huge domestic travel market.

Ground Handling Logistics, which handles more than 300 airlines and employs 4,000 staff, has signed memorandums of understanding to explore partnerships with airports in Turkey, Bahrain and Kuwait as it seeks to grow its business outside the kingdom, Mr Al Nahdi said.

In the UAE, it is in talks with Dubai's Emirates to offer ground handling services in the airline’s outposts in Saudi Arabia and is seeking business with Abu Dhabi International Airport’s new Midfield Terminal when that begins operations, scheduled for late next year.

The Saudi Arabian company, which operates in more than 20 airports across the country including King Fahd International Airport and King Salman bin Abdulaziz Airport, is bidding for the third licence to handle ground services in the kingdom. A decision by aviation regulator General Authority of Civil Aviation (GACA) has yet to be made, Mr Al Nahdi said.

Saudi Arabian Airlines’ unit won the first licence and Swissport won the second permit in 2015.