Privatization to Generate SR550 Million

JEDDAH, 20 May 2004 — The privatization of the National Company for Cooperative Insurance (NCCI) and Saudi Arabian Mining Company (Maaden) is expected to bring at least SR550 million to national coffers.

The Supreme Economic Council (SEC), chaired by Crown Prince Abdullah, decided to sell state shares in NCCI and approved steps to privatize Maaden on Tuesday. The SEC did not, however, give a specific date for the privatization of the two state-owned firms.

SEC Secretary-General Dr. Abdul Rahman Al-Tuwaijeri said the council’s meeting decided to sell state shares worth SR250 million owned by Public Investment Fund in NCCI which has a capital of SR500 million.

The General Organization for Social Insurance and Pension Fund are expected to maintain their stake (25 percent each) in the Kingdom’s only official insurance company which has five million shares, each with a nominal value of SR100.

Suleiman Al-Homaid, chairman of GOSI, welcomed the sell-off and said it would strengthen the private sector’s participation in the national economy and boost the country’s insurance sector.

Maaden, which is fully owned by the government, is expected to sell 40 to 50 percent of its stake in the precious metals sector in which the company has invested SR600 million, Al-Watan Arabic daily said, quoting informed sources.

Maaden was established with a capital of SR4 billion in 1997 in order to utilize the Kingdom’s rich mineral resources. The company, which is involved in huge projects, is now estimated to be worth several billion dollars.

Dr. Abdullah Al-Dabbagh, chairman of Maaden, commended the SEC decision, approving the basic steps to privatize the company. “According to the SEC decision, Maaden will be privatized in phases,” he said.