Saudia cargo unit IPO likely this year
Dubai, February 5, 2014
Saudi Arabian Airlines (Saudia) plans to conduct an initial public offer of shares in its cargo unit this year and an IPO for its maintenance business in 2015, a senior official said on Wednesday.
The cargo unit would be the second of six units - the others are catering, ground services, maintenance, airlines and flight academy - to pursue a stock market listing following Saudia's decision in 2006 to privatise them.
The first of the units to be sold publicly, Saudi Airlines Catering Co, raised $347 million with an IPO of 30 percent of its shares in 2012. Its shares rose 81.4 percent last year.
"The catering has already been done. So the next one this year would be cargo and that will be followed by the maintenance unit in 2015," Abdulrahman Altayeb, vice president for maintenance at Saudia, said on the sidelines of a conference in Dubai.
He did not specify exactly when the cargo unit would be listed.
"The maintenance IPO cannot be expected before June 2015. We will look to sell about 30 percent of this unit."
Saudi Arabia's stock market witnessed five new listings in 2013 with a combined value of 1.96 billion riyals ($523 million). Saudi Arabia had 163 listed companies as of end-2013.
The country opened its domestic aviation market to competition in 2012 as part of reforms aimed at improving service levels and accessibility. Qatar Airways is expected to launch domestic operations in Saudi Arabia this year.
Saudia, which competes with regional aviation giants such as Emirates and Etihad Airways, has been looking to expand its global reach and is in talks with plane makers Boeing and Airbus to buy new jets before the end of the year.
"We have a requirement of about 50 planes and are in talks with manufacturers about this," said Altayeb. "We will have to decide on this before the end of the year."
He added: "It will be a mix of wide-body and narrow-body planes." The company is looking at Boeing's new wide-body 777X as well as the Airbus A380 superjumbo.
On narrow-body planes, both the Airbus A320neo and the Boeing 737 MAX are being considered, he said. - Reuters