x Abu Dhabi, UAESunday 23 July 2017

Saudi's Kingdom Holding to sell bonds for first time

Kingdom Holding, the investment vehicle controlled by Saudi Arabia's Prince al Waleed Bin Talal, is planning to sell bonds for the first time.

Prince Alwaleed bin Talal, the owner of Kingdom Holding. AFP
Prince Alwaleed bin Talal, the owner of Kingdom Holding. AFP

Kingdom Holding, an investment vehicle controlled by Saudi Arabia's Prince Al Waleed bin Talal, is planning to sell bonds for the first time.

The company joins a growing list of Saudi companies lining up to issue debt this year.

Kingdom Holding is due to hold a shareholders' meeting on March 27 to gain approval to sell conventional or Islamic bonds, the firm said in a statement to the country's stock market.

"Bonds sold so far this year in Saudi Arabia have been warmly welcomed by the market and are helping to bolster prospects for new issues," said Mohamed Gouali, the managing director and head of investment banking at Al Mal Capital in Dubai.

"There's a lot of money in the market and new issues are likely to be well received."

Kingdom Holding's high-profile investments are likely to help to stoke demand for the firm's debt both locally and globally, he added.

Under the stewardship of Prince Al Waleed, the firm has taken stakes in an eye-catching array of international firms including Apple, Citigroup and most recently the microblogging site Twitter.

Kingdom Holding had current bank borrowings and loans of 1.46 billion Saudi riyals (Dh1.43bn) at the end of last year, according to its financial statements. But so far it has not issued public debt to fund its investments.

The potential sale comes as corporate bonds are set to hit a record this year on the back of a wave of higher government spending.

Saudi Arabian Mining, the nation's largest miner, and Almarai, the region's largest dairy foods firm, have both said they plan to issue bonds this year.

Action has been hotting up in the debt market since the General Authority of Civil Aviation sold 15bn riyals of Islamic bonds in January.

Kingdom Holding that month posted a 19.9 per cent drop in profit for the fourth quarter of last year, with net income dropping to 187.8 million riyals compared to the same period of the year before.

"Kingdom Holding enters the year 2012 with solid optimism and continues to distribute dividends," Prince Al Waleed said after the company released the results.

He owns 95 per cent of Kingdom Holding, which was publicly listed on the Saudi Tadawul exchange in 2007.

For the past eight years, Prince Al Waleed has been listed as the richest Arab by Arabian Business magazine. Last year his net worth was estimated at US$21.3bn (Dh78.2bn).

As well as planning to build the tallest tower in the world in Jeddah, Kingdom has also had a focus on the media industry.

In December, the firm expanded its global media holdings with a US$300m (Dh1.1bn) investment in Twitter.

tarnold@thenational.ae

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