New Telegraph

Saudi Arabia’s Biggest Airline To List 30% Stack In Cargo Firm

Saudi Arabia’s largest airline, along with another shareholder, is planning to list a 30% stake in SAL Saudi Logistics Services Co., a cargo firm, in an initial public offering in Riyadh.

This is coming after the Kingdom’s IPO market gains momentum following a slow start to the year.

Saudi Arabian Airlines Corp., also known as Saudia, and Tarabot Air Cargo Services Ltd. are offering 24 million shares in the cargo firm in the Tadawul listing, according to a statement issued on Tuesday.

Saudia currently owns 70 per cent of SAL while Tarabot owns 30 per cent of the firm.

SAL joins a growing pipeline of companies looking to list in the Gulf’s biggest market, buoyed by a 12 per cent rally in the benchmark index since a March low on more stable oil prices and optimism from earnings.

Oil driller ADES Holding Co., backed by the Kingdom’s sovereign wealth fund, started taking investor orders for its IPO of as much as $1.2 billion on Sunday, set to be Saudi Arabia’s biggest of the year.

Meanwhile, car rental firm Lumi Rental Co. drew orders of about $27 billion for its $290 million listing last week, underscoring continued appetite for Saudi share sales.

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ADES alone will more than double Saudi Arabia’s current IPO haul so far this year of $901 million, which is less than a fifth of the proceeds in the year-ago period, data compiled by Bloomberg show.

SAL is the leading cargo-handling player in Saudi Arabia with a roughly 95 per cent market share and also handles transit and export shipments.

The company had a revenue of 1.22 billion riyals ($325 million) in 2022 and a net income of 362 million riyals.

In the first half of this year, SAL posted revenue growth of 15 per cent year-on-year.

Saudi Arabia has outlined an ambition to become a global supply chain hub and develop one of the largest airports in the world in Riyadh, as part of its plans to diversify the economy.

HSBC Holdings Plc’s Saudi unit has been appointed as sole financial advisor, bookrunner, global coordinator, lead manager and underwriter for the IPO.

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