Citigroup returns to Saudi Arabia: ‘Right place, right market, right time’

Citigroup is returning to Saudi Arabia after leaving the Kingdom in 2004, It is just one of a number of multinationals making a return to the Kingdom. (Reuters)
Updated 17 April 2018
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Citigroup returns to Saudi Arabia: ‘Right place, right market, right time’

Dubai: Citigroup, the American financial giant that quit Saudi Arabia in 2004, yesterday put the seal on its return to the Kingdom with a formal opening ceremony in Riyadh.
The re-entry could be lucrative for the bank, which will be able to play a full role in the financial opportunities presented by the Vision 2030 plan to transform the economy, including a big program of sovereign bond debt issuance and privatizations.
Mike Corbat, Citi’s group CEO, attended the ceremony alongside Ibrahim Al-Omar, the governor of the Saudi Arabian General Investment Authority.
Al-Omar said: “You are at the heart of Arab markets and the biggest market in the region, where Saudi Arabia connects three continents. Vision 2030 is not possible without partners, and you are our very welcome partners. Citi will be able to take part in a privatization program that will see, between now and 2030, up to 100 opportunities. There are other opportunities, too, especially in the entertainment sector. You are in the right place in the right market at the right time.”
Corbat said: “We are delighted to establish an office in the Kingdom and be open for business on the ground. The expansion to Saudi is in line with our strategy to be present in the region’s biggest economy and contribute to its transformation.
“Citi continues to support the Kingdom’s national agenda for a diverse and sustainable economy and we aim to play a key role toward realizing this vision,” he added.
Some Citi executives admitted the 2004 withdrawal was “a mistake,” and for the past two years the bank has played a central role in the big sovereign bond issuance program.
Last year, the Saudi Arabian Capital Market Authority (CMA) granted Citi a license to provide a range of investment banking and capital market business.
Citi executives have said they could also look to get a license from the Saudi Arabian Monetary Authority, which would enable it to also offer trade banking and treasury services.
At the Riyadh ribbon-cutting ceremony at the bank’s new offices in Kingdom Tower, Citi, through its Foundation arm, also handed over a $300,000 cheque to renew its partnership with Education for Employment Global, a Washington DC-based non-profit organization that helped train and find employment for 67,000 young people in the region.


Saudi Aramco in talks for stake in world’s no. 4 chemical firm

Updated 19 July 2018
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Saudi Aramco in talks for stake in world’s no. 4 chemical firm

  • Aramco made the invitation for the SABIC deal to the banks last month
  • The oil giant is expanding its footprint globally by signing downstream deals and boosting the capacity of its plants

DUBAI: Saudi Aramco said on Thursday it is looking to buy a stake in Saudi petrochemical maker SABIC, a move that could boost the state oil giant’s market valuation ahead of a planned initial public offering.
Aramco said in a statement that it was in “very early-stage discussions” with the Kingdom’s Public Investment Fund to acquire the stake in SABIC via a private transaction. It has no plans to acquire any publicly held shares, it said.
In a separate statement, the PIF also said that talks about a sale were in early stages. “There is a possibility that no agreement will be reached in relation to this potential transaction,” it said.
Reuters reported on Wednesday that Saudi Aramco had invited banks to pitch for an advisory role on the potential acquisition of a strategic stake in Saudi Basic Industries Corp, citing two sources with direct knowledge of the matter.
Aramco wants to develop its downstream business as the government prepares to sell up to 5 percent of the world’s largest oil producer, possibly by next year. Boosting its petrochemicals portfolio further could help attract investors for the IPO.
Riyadh-listed SABIC, the world’s fourth-biggest petrochemicals company, is 70 percent owned by the Public Investment Fund (PIF), Saudi Arabia’s top sovereign wealth fund. It has a market capitalization of 385.2 billion Saudi riyals ($102.7 billion).
The Aramco IPO is the centerpiece of an ambitious plan championed by Crown Prince Mohammed bin Salman to diversify Saudi Arabia’s economy beyond oil.
Aramco made the invitation for the SABIC deal to the banks last month, said the sources, declining to be identified due to commercial sensitivities.
Aramco plans to boost investments in refining and petrochemicals to secure new markets for its crude, and sees growth in chemicals as central to its downstream strategy to lessen the risk of a slowdown in oil demand.
The oil giant is expanding its footprint globally by signing downstream deals and boosting the capacity of its plants.
Aramco’s push into chemicals also includes a mega project it is building at home with SABIC. The $20 billion project would build a complex that converts crude oil into chemicals directly, bypassing the refining stage.