DUBAI: Two of Saudi Arabia's largest private hospital groups will seek to float their shares on the Kingdom's bourse next year, banking sources aware of the matter said, aiming to capitalize on investor interest in the fast-growing healthcare sector.
Healthcare businesses in the Gulf Arab region are expected to boom in coming years on the back of rising wealth coupled with an increase in so-called lifestyle diseases - five of the six Gulf nations are in the global top 10 for prevalence of diabetes for instance, according to the International Diabetes Federation.
Healthcare spending in Saudi Arabia is set to increase to around SR174 billion ($46.4 billion) in 2017 from 68.7 billion in 2010, according to a November 2012 report from Riyadh-based NCB Capital.
Seeking to reflect such demand, Sulaiman Al-Habib Medical Group (HMG), one of the largest private providers of healthcare in the Gulf Arab region, has appointed the investment banking arm of Banque Saudi Fransi to assist with a planned share sale, two Saudi banking sources said, speaking on condition of anonymity as the matter has not been made public.
Almana General Hospitals (AGH), focused on the Kingdom's Eastern Province, also wants a listing on the local bourse and has appointed GIB Capital, the investment banking arm of Gulf International Bank, to help with the process, according to the sources.
HMG's initial public offering (IPO) is likely to be the largest for an established private company in Saudi Arabia since investment firm Kingdom Holding in 2007, one of the sources said. Kingdom, now worth $21.5 billion, had floated 5 pct of the company to raise SR3.23 billion.
HMG operates 14 medical facilities across Saudi Arabia, the United Arab Emirates and Bahrain, including seven hospitals and six medical centers. The group also owns the Olaya Medical Centre in Saudi's capital Riyadh, consisting of about 300 medical centers.
AGH had a net income of between SR100 million and SR150 million ($27 million to $40 million) in 2012 and the business could be valued at 13 times that figure, one source said. The company operates facilities in regions such as Dammam, Alkhobar, Jubail and Hofuf.
HMG did not respond to emails and calls seeking comment. An AGH spokesman was not available for comment.
Both companies are expected to list in the latter part of 2014 or early 2015, the sources said, with their applications set to be fast-tracked by the authorities. No details were yet available on what amount they were likely to raise but both would offer around 30 percent of their shares to the public.
"Saudi regulators would like to see more healthcare IPOs coming to the market, so it's unlikely that these companies will have a long waiting period like some of the other firms," a second Saudi-based banking source said, adding the increased diversification of a bourse dominated by petrochemicals and banks would be of benefit to investors.
The source also said planned government-led healthcare projects in the Kingdom may curb the profitability of private operators in future.
Saudi Arabia's stock market, whose constituents have a combined market value of about $430 billion, is the largest in the Gulf Arab region and the most active for IPOs. However it is not yet fully open to international investors and share issues are usually priced at a significant discount to benefit local citizens.
Outside the Kingdom, United Arab Emirates-based Al Noor Hospitals and NMC Healthcare have sold shares in London in the last 18 months and are around 48 and 71 percent up on their IPO price.
Two Saudi healthcare firms plan IPOs as demand booms
Two Saudi healthcare firms plan IPOs as demand booms
Over 3k flights cancelled across the Middle East after attack on Iran by the US, Israel
RIYADH: US and Israeli strikes on Iran led to widespread airspace shutdowns in the Middle East, canceling and rerouting thousands of flights and paralyzing key international travel corridors.
Flight cancellations affected seven airports across the Middle East, including Dubai and Abu Dhabi in the UAE, Doha in Qatar, and Manama in Bahrain.
Emirates Airlines said in a statement: “Due to multiple regional airspace closures, Emirates has temporarily suspended all operations to and from Dubai, up until 1500 hrs UAE time on Monday, 2 March.”
A flydubai spokesperson said the situation is evolving, and the airline is closely monitoring developments while coordinating with authorities to adjust its flight schedule.
“Our teams are working diligently to implement comprehensive welfare for all affected customers. The safety of our passengers and crew remains our highest priority,” the spokesperson said.
He added: “We are currently experiencing a high volume of calls and appreciate our customers’ patience while our teams work to assist everyone as quickly as possible.”
Qatar Airways announced that the airport will remain closed until at least the morning of March 2.
“Qatar Airways flights to, and from, Doha have been temporarily suspended due to the closure of Qatari airspace,” the airline said.
It added: “Qatar Airways will resume operations once the Qatar Civil Aviation Authority announces the safe reopening of Qatari airspace.”
Saudia also said in an official statement that it had canceled a number of flights due to developments in the region and the closure of airspace.
The organization said the decision was taken in line with aviation safety and security standards, noting that its Emergency Coordination Center is closely monitoring developments with relevant authorities.
Saudia urged passengers to verify the status of their flights before heading to the airport and said guests would be notified of updates through the contact details associated with their bookings.
The carrier added that further information would be announced in a subsequent statement if available.
Air Arabia also said its flights were experiencing cancellations, delays, or rerouting as a result of the evolving situation and airspace closures.
Airlines cited airspace closures and safety concerns as the main reasons for flight disruptions, urging passengers to check official channels for updates as the situation develops.
Israeli airspace also remained closed on March 1st. Israeli airline El Al said it was preparing a recovery effort to bring home Israelis stranded abroad once the airspace reopened.
Travelers were either stranded or diverted to other airports on Feb. 28 after Israel, Qatar, Syria, and Iran as well as Iraq, Kuwait and Bahrain, closed their airspace.
After the UAE announced a temporary partial airspace closure, FlightRadar24 recorded no flights over the country.
The closures affected key hub airports in Dubai, Abu Dhabi, and Doha. Emirates, Qatar Airways, and Etihad, airlines that operate from these hubs, normally handle around 90,000 passengers daily, with even more traveling to other Middle Eastern destinations, according to aviation analytics firm Cirium.
Airports hit by attacks
Two airports in the UAE reported incidents as the government there condemned what it called a “blatant attack involving Iranian ballistic missiles” on Feb.28.
Dubai International Airport, the UAE’s largest and one of the world’s busiest, reported four injuries, while Abu Dhabi’s Zayed International Airport said a drone attack killed one person and injured seven others. Strikes were also reported at Kuwait International Airport.
Though Iran did not publicly claim responsibility, the scope of retaliatory strikes that Gulf nations attributed to Iran extended beyond the US bases that it previously said it would target.
Flight delays, cancellations are likely to continue
“For travelers, there’s no way to sugarcoat this,” said Henry Harteveldt, an airline industry analyst and president of Atmosphere Research Group.
“You should prepare for delays or cancellations for the next few days as these attacks evolve and hopefully end,” he added.
To avoid conflict zones, airlines are rerouting Middle East flights over Saudi Arabia, adding hours and fuel costs, which could push ticket prices higher if the tensions persist.
The extra flights will strain air traffic controllers in the Kingdom, who may need to slow traffic for safety. Meanwhile, countries that closed their airspace will lose out on overflight fees from passing airlines.
Mike McCormick, former head of air traffic control at the FAA and now a professor at Embry-Riddle Aeronautical University, said some countries may reopen parts of their airspace in the coming days once US and Israeli officials provide airlines with details on military flight zones and Iran’s missile capabilities.
“Those countries then will be able to go through and say, ok, we can reopen this portion of our space but we’ll keep this portion of our airspace closed,” McCormick said.
“So, I think what we’ll see in the next 24 to 36 hours is how the use of airspace evolves as the kinetic activity gets more well-defined and as the capability of Iran to actually shoot missiles and create additional risk is diminished due to the attacks,” he added.
But it is unclear how long the disruption to flight operations could last. For comparison, the Israeli and US attack on Iran in June 2025 lasted 12 days.
