Riyadh — Mubasher: Saudi Arabia is expected to see a busy year of asset sales if the oil-rich nation forges ahead with its schemes.
By 2020, the Saudi government seeks to raise around $11 billion through its privatisation scheme that comprises the sale of stakes in utilities, soccer clubs, flour mills and medical facilities, Bloomberg News reported on Sunday.
These deals constitute crucial importance in the kingdom’s efforts to diversify its economy away from oil revenues.
To this end, Saudi Arabia is looking to finalise the sale of four flour milling firms and Saudia Medical Services facilities this year, the National Center for Privatization (NCP) said.
Saudi Arabia’s privatisation process “has been one of the areas of the long-term reform agenda that has missed expectations, and has done so repeatedly,” Jean-Paul Pigat, head of research at Dubai-based Lighthouse Research, told Bloomberg.
Saudis’ biggest privatisation schemes also include the share sale of state-run oil giant Aramco announced in 2016 and expected to be the world’s biggest initial public offering (IPO).
Aramco's IPO was pushed back to late 2020 or early 2021 from 2018 so it could finalise a $70 billion stake acquisition in Saudi Arabia’s biggest petrochemical company Sabic, Bloomberg said.
In September, Saudi Arabia unveiled plans to sell a stake in King Khalid International Airport, but they have been delayed.
In 2017, Saudi Arabia hired BNP Paribas SA to advise on the sale of the $7.2 billion Ras Al Khair power plant on the east coast. The deal, which is part of a broader strategy to privatise Saline Water Conversion Company, is projected to be finalised by 2020.
As for the Saudi soccer clubs, the NCP said there are not current “obstacles” could undermine the sale of the clubs by 2020.
In June 2018, former head of the Saudi Sports Authority Turki Al Alshikh expected the sale of 16 clubs to raise $800 million to $1.5 billion in revenues.
In the health sector, the NCP will also open PPP tenders in radiology, laboratories, hospital commissioning and housing for health facilities staff, eyeing as much as SAR 28 billion ($7.5 billion) in public-private partnership investments, according to Bloomberg News.
