Friday, December 1, 2023

Saudi Sovereign wealth fund to pick 30pc stake in Almosafer

Saudi Sovereign wealth fund to pick 30pc stake in Almosafer

Saudi Arabia’s sovereign wealth fund is seeking to build $412 million stake in Almosafer Travel & Tourism Co., a unit of Riyadh-listed Seera Group Holding. The investment of 1.55 billion riyals ($412 million) includes a 386 million-riyal earn-out amount. As part of the pact, Seera’s destination management company — Discover Saudi and its Hajj and Umrah travel operator — Mawasim will fall under Almosafer.

Chaired by Crown Prince Mohammed bin Salman, the $620 billion PIF is plowing deeper into public markets as it pursues the goal of increasing its assets to about $1 trillion by 2025. The wealth fund is boosting its investments in equities as Saudi Arabia’s income from oil almost doubled in the second quarter.

The fund bought a $1.5 billion stake in the investment company of billionaire Prince Alwaleed Bin Talal in May. The earn-out amount will be conditional on Almosafer achieving certain pre-agreed KPIs in 2023 and 2024.

The company said this would help to strengthen its credentials as a “national champion of travel and tourism services in Saudi Arabia.”

Almosafer recorded the best quarter in its history for consumer travel bookings for the quarter ending June 30, 2022 exceeding pre-pandemic levels in June 2019 by 27 per cent. The travel company saw a 89 per cent growth in gross booking value to $346 million in the second quarter, up from $240 million in the second quarter of 2021. Almosafer’s consumer travel unit achieved its highest ever quarterly gross booking value registering an increase of 175 per cent compared to the same period last year.

The shares of Seera rose as much as 3.5 per cent in Riyadh earlier this week.

The Public Investment Fund plays a pivotal role in realizing Vision 2030, Saudi Arabia’s economic transformation program, as it strategizes to diversify the national economy and reduce the reliance on oil.

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