RIYADH: Saudi Binladin International Holding is carrying out the largest debt restructuring in the Middle East, close to SR33 billion ($8.7 billion), with as much as 75 percent involving Saudi banks, said CEO Khalid Al Gwaiz on Thursday.
The company has obtained principal approvals from creditors for the debt restructuring and hopes to reach a formal agreement with them by the end of June and a final agreement by September, Al Gwaiz told Al Arabiya.
Binladin has an integrated transformation program that includes budget structuring and changes to its business model with the aim of helping it cope with recent developments in the market, he said.
The regional construction sector has been hit hard by the weakening of oil prices since 2014 and the associated decline in the real estate sector which has plunged some of the industry’s biggest names into financial distress.
Binladin has identified about SR1 trillion of opportunities in the Kingdom’s construction market linked to huge government projects that will allow it to pay creditors, Al Gwaiz said.
Binladin International carries out largest debt restructuring in the region
https://arab.news/8de92
Binladin International carries out largest debt restructuring in the region
- As much as 75% of Binladin's debts are held by Saudi banks
- Formal agreement with creditors may be reached by end June
Saudi PIF surges to 2nd place among GCC region’s sovereign wealth funds with $925bn in assets
RIYADH: Saudi Arabia’s Public Investment Fund has soared in an annual global ranking of sovereign wealth organizations, thanks to a 55 percent increase in assets under management.
The value of PIF’s portfolio now stands at $925 billion, according to US-based Sovereign Wealth Fund Institute, up from $595.6 billion in 2022.
This means the organization has surged past Kuwait’s sovereign wealth fund on this metric, and is now only behind Abu Dhabi Investment Authority in the Gulf region.
This climb was further bolstered by PIF’s deal in March where it raised its stake in Aramco by 8 percent to approximately $328 billion. This move represents 37 percent of its portfolio and elevates it to fifth place overall in the global sovereign wealth funds rankings.
“The value of the Aramco stake could grow as the government releases more shares to the public, which will help boost PIF’s financial clout and its credit rating as it helps develop on the Vision 2030 ambitions,” SWFI stated.
According to the Global SWF, the Saudi sovereign fund’s ability to access borrowing markets is vital for achieving its objectives. Estimates by the institute suggest PIF’s total debt stands at approximately $36 billion, with recent fundraising of $7 billion from two sales in the early months of 2024.
In its March report, the industry specialist added that PIF became the world’s largest sovereign investor in 2023, deploying $31.6 billion across 49 deals, a 33 percent increase from 2022.
In January, PIF acquired a 23.1 percent stake in the Middle East Paper Co. for SR522 million ($139.1 million), enhancing Mepco’s growth and bolstering its role as a regional provider of paper products for construction while strengthening the local supply chain.
Additionally, the fund entered the transportation sector, launching Riyadh Air with a $30 billion investment in 2023, and investing in Saudia Technic for aviation services.
PIF is set to finalize the acquisition of the Saudi Iron and Steel Co., also known as Hadeed, from SABIC for $3.3 billion. Collaborating with South Korea’s POSCO, the wealth fund is also promoting green hydrogen production, aiming to foster a low-carbon steel sector.
PIF’s ambitious goal is to manage $2 trillion in assets by 2030, with 83 percent in domestic holdings.
Meanwhile, the UAE’s Abu Dhabi Investment Authority, also known as ADIA, maintained its formidable presence this year, securing the leading position in the region with assets under management totaling $993 billion, a significant increase from $790 billion in 2022.
In third position among Gulf states, the Kuwait Investment Authority showcased a total of $846 billion in assets, up from $750 billion in 2022.
Qatar also upheld its standing as the fourth largest sovereign wealth fund in the region, with the Qatar Investment Authority reporting a 7.36 percent increase from $475 billion to $510 billion in assets in 2024.
As per the Global SWF, Middle Eastern wealth funds oversee $4.8 trillion in financial capital. Out of the 60 mega-deals recorded in 2022, Gulf funds executed 25, with only 17 involving US or European businesses.
In the fifth place for the region, Investment Corp. of Dubai boasted a total of $341 billion in assets followed by Abu Dhabi’s Mubadala and Developmental Holding Co., known as ADQ, reaching $276 billion and $199 billion, respectively.
Saudi Arabia’s National Development Fund secured the eighth position across the Gulf, reporting $132 billion, followed by the Emirates Investment Authority with $91 billion and Dubai World with a total of $47 billion.
S&P upgrades Egypt’s economic outlook to positive
RIYADH: Egypt’s economy witnessed an uptick in ratings as S&P Global upgraded its outlook for the country to positive from stable.
The US-based firm also affirmed Egypt’s debt rating at “B-/B,” according to a statement.
This move is is indicative of the fact that the country currently has the capacity to meet its financial obligations but faces ongoing uncertainties.
GCC telecommunication firms reinventing themselves as ‘techcos’: S&P Global
RIYADH: Telecommunication companies in the Gulf Cooperation Council region are redefining themselves as technology firms to diversify their revenue streams, S&P Global said.
In its latest report, the credit rating agency noted that moderate growth prospects for core telecom operations are one of the key drivers which compel these firms to rebrand as techcos.
Techcos can be defined as telecommunication companies that focus more on technology. These firms provide connectivity through newer channels, such as cloud computing platforms, making integrating hardware, connectivity and applications easier.
According to the S&P Global report, “techcos are gaining ground” in the region, adding: “Rated GCC telcos – including Beyon, e&, Ooredoo, and stc – aim to enhance their techco services and have already expanded their non-telecom businesses over the past few years.”
According to the report, telecommunication firms in the region provide a plethora of non-telecom services, with cybersecurity, cloud services, the Internet of things, as well as artificial intelligence, and data centers primarily targeting business-to-business customers.
Moreover, the GCC region’s mature telecom markets, with mobile penetration rates of 130 percent to 210 percent, offer limited organic growth prospects for telecommunication companies.
“The GCC telcos we rate are typically major local players, operate in a relatively favorable and stable regulatory environments, and benefit from their leading market positions and well-invested asset base. Even so, they suffer from a decline in some core telecom services, including fixed voice telephone and messaging services,” said S&P Global.
Additionally, these companies are also offering fintech services aimed at both business-to-business and business-to-consumer customers.
“Fintech offerings capitalize on digitalization trends, tech-savvy young populations in the Middle East, and underbanking in emerging markets,” said S&P Global.
The report further noted that telecommunication companies in the region are also venturing into media, entertainment and e-gaming sectors.
S&P Global also highlighted some recent acquisitions made by telecommunication firms in the GCC region to diversify their businesses.
In 2022, Saudi Telecommunications Co. secured significant stakes in systems integrator firms Giza Systems and Giza Arabia Systems.
Moreover, last year, UAE-based e& acquired over 50 percent of Careem Super App, an application that provides food and grocery delivery, micro-mobility, digital wallet, as well as fintech services.
The study pointed out that GCC governments’ digitalization and economic development agendas will support digital businesses and boost consolidated revenues of telecommunication firms.
“We estimate non-telecom operations currently contribute about 15 percent to 16 percent to rated GCC telcos’ combined revenues,” the report said.
It added: “While core telecom services will continue to account for most revenues and remain the overwhelming profit generators in the short term, we expect digital businesses will grow at a significantly faster pace.”
The report noted that telecommunication firms in the region will witness low single-digit growth for telecom revenues and organic growth of 10 percent to 20 percent per year in non-telecom revenues.
Mergers and acquisitions could compound organic growth in the non-telecom sector, resulting in much faster revenue accretion from tech-related services, the study stated.
Saudi EXIM exceeds annual credit facilities target by 33%
RIYADH: The total value of credit facilities implemented by the Saudi Export-Import Bank in 2023 reached SR16.5 billion ($4.39 billion), exceeding the annual target by 33 percent.
This figure represents 5.2 percent of the total financial arrangements for the Kingdom’s non-oil outbound trade, the Saudi Press Agency reported.
This falls in line with the institution’s aim to enhance confidence in regional exports and their entry into new markets, and aligns well with its goal of adding value to Saudi-made exports and imports.
“The results of the bank’s work during this year reflect the extent of the bank’s focus on its strategic objectives in building bridges of trade communication with the economies of countries around the world, in order to enable Saudi non-oil exports globally and achieve the objectives of the Kingdom’s Vision 2030,” CEO of Saudi EXIM Bank Saad Al-Khalb said.
“The bank has achieved remarkable excellence in key performance indicators, as well as focusing on integrated work with government institutions and the private sector to contribute to national initiatives and strategic plans aimed at supporting the process of sustainable development and economic diversification,” Al-Khalb added.
Dubai annual inflation eases to 3.36%
RIYADH: Annual inflation in Dubai experienced a modest decrease in February, marking a deceleration to 3.36 percent from January’s rate of 3.6 percent, according to official data.
This downturn is largely attributed to declines in the costs of transportation, as well as in the recreation, sports, culture, and tobacco sectors, a report by the Dubai Statistics Center highlighted.
Transportation saw a significant change during the month, going from -1.03 percent in January to -3.09 in February, a threefold deceleration.
The food and beverages sector, which holds a significant 11.6 percent weight in the overall index, also saw a reduction in its inflation rate, dropping to 3.08 percent from 3.69 percent in January.
This slowdown reflects a broader trend of easing price pressures in this vital category.
On the other hand, housing and water, as well as electricity, gas, and other fuels — sectors which hold above 40 percent influence on the overall index — witnessed a slight increase in their price growth rate, rising to 6.25 percent from 6.2 percent in January.
This increment, although marginal, indicates continued cost pressures in some of the core living expenses for residents in the emirate.
Furthermore, Dubai’s non-oil private sector maintained its growth momentum in February, with the emirate’s Purchasing Managers’ Index reaching 58.5, the highest since May 2019, a survey showed.
According to the PMI report by S&P Global, the significant growth in Dubai’s private sector was driven by an increased volume of new orders. This surge prompted companies to hire people at the fastest rate in the last eight years.
In January, Dubai’s PMI stood at 56.6, compared to 57.7 in December and 56.8 in November.
According to S&P Global, any PMI reading above 50 indicates growth in the non-oil sector, while readings below that figure signal contraction.
David Owen, senior economist at S&P Global Market Intelligence, said: “The Dubai PMI climbed to 58.5 in February, which is its joint-strongest reading since 2015 — matching May 2019 — and suggests that the Dubai non-oil economy is growing rapidly so far this year.”
He added: “The reading signals that the Dubai non-oil sector is one of the fastest growing worldwide according to global PMI data.”
The survey revealed that 36 percent of the respondents saw their output increase since the previous poll period, signaling the fastest upturn in 18 months.