Apicorp buys key stake in Saudi energy firm
Manama, October 9, 2013
Arab Petroleum Investments Corporation (Apicorp), a Saudi-based multilateral bank owned by the Arab states, has reached a deal with Arabian Pipes Company (APC) to acquired its 5.62 per cent equity stake in Saudi-based Industrialization and Energy Services Company (Taqa).
A closed joint stock company established in 2003 as part of Saudi Arabia’s privatisation strategy, Taqa is 45 per cent owned by the Saudi Government, with the reminder owned by several institutional, private and industrial investors.
With this move, Apicorp is now the joint third largest shareholder in the company with over 11.2 million shares, said a senior official.
"The Taqa equity acquisition is a perfect fit for our investment strategy. It is consistent with Apicorp's commitment to supporting prominent Arab energy companies that show significant growth and value-creation potential," remarked its CEO and GM Ahmad Bin Hamad Al Nuaimi.
"At the same time, it dovetails well into our objective of diversifying into sectors that provide vital support services for the hydrocarbon industry," he stated.
Al Nuaimi said Taqa had achieved robust growth over the last decade and its development has also brought tangible economic benefits, one of them being transfer of know-how.
"As part of our mandate, we are keen to invest in companies like Taqa, which play a crucial role in helping Arab countries maximize efficiencies in the energy value chain. As the company gears to expand its operations, we look forward to supporting its growth along with other key shareholders,"" he added.
Apicorp has a long and successful track record in participating as an equity stakeholder in companies in the Arab world.
The multilateral development bank, in which Bahrain has a 3 per cent stake, participates in the strategic and managerial development of its investee companies, bringing many strengths to their development including its strong capital and liquidity position, relationships with a range of institutional players, financial advisory services, and extensive technical and project management know-how.
Riyadh-based Taqa has a substantial portfolio of subsidiaries and affiliates established in joint ventures with global leaders.
These companies are today leading operators in fields such as drilling, geophysical services, oil field services, seamless pipe manufacturing, industrial gases, and oil and gas offshore platform fabrication.
The joint ventures in which it is a majority shareholder include Arab Drilling Company, one of the top Saudi drilling companies, established in alliance with Schlumberger; Arabian Geophysical & Surveying Company formed in partnership with CGG Veritas; and Al-Jubail Energy Services Company, the GCC region’s first seamless pipes manufacturing company.
The other joint ventures include Sisal, an oil fields services company ; Star, the first major initiative in fabricating platforms for the offshore oil and gas fields in Saudi and Air Liquide Arabia, established in alliance with Air Liquide, the world's largest supplier of industrial gases.
ALAR has signed a 20-year gaseous nitrogen supply pact with Saudi Aramco to supply its projects in Qurrayah; and recently began the construction of global-scale hydrogen generators that will supply the Red Sea Refinery in Yanbu with hydrogen for 30 years.
Taqa has exhibited consistent growth since its establishment in 2003. In 2012, the company reported a net profit of SR175 million ($46.6), a growth of 237 per cent from 2011. The total assets of the company stood at SR7.8 billion at the end of last year.
Al Nuami pointed out that Taqa’s growth and ambitious expansion made it a very valuable addition to Apicorp's investment diversification programme, which earlier this year saw the launch of the Apicorp Petroleum Shipping Fund.
"Establishing the right balance in our funding composition and prudently managing our debt has allowed us to accelerate the momentum of our investment growth," he remarked.
"The success of our investments is borne out by our high asset quality, which was a key factor in Moody’s affirmation of Apicorp’s Aa3 rating in September. Encouraged by these positives, we will continue to explore investment opportunities in new oil and gas and services sectors across the Arab world,” he added.-TradeArabia News Service