RIYADH, 2 July 2006 — An SR600-million company, called Combined Saudi Co, has been set up in the Eastern Province as part of a comprehensive plan to promote Saudi-Kuwaiti investment in real estate, health care, tourism and other sectors.
Addressing a press conference here, Yousef Malallah, deputy CEO of Investment Dar Co. K.S.C., announced that 70 percent of the share capital of the newly established firm will be drawn from the Investment Dar and Al Dammam Construction Co.
The remaining share will be offered to selected investors, with a projected internal rate of return of around 28 percent.
Abdulrahman Al-Dawood, general manager, Al Investment Dar Asset Management Co. K.S.C., Mohammed A. R. Al-Dossary, CEO, Al-Dammam Construction Co., and Montasir S. Al-Yaqoub, legal adviser to the company, were also present.
Referring to the composition of their share capital, Mallalah said Investment Dar Co. will hold 35 percent of the company’s capital, estimated at SR600 million.
The company’s capital would be distributed on 600 million shares on the market with a nominal value of SR10 each. Of the total share capital, 30 percent of the shares will be floated for public subscription. The Al Investment Dar Asset Management (ADAM) as lead manager in underwriting major projects in Kuwait, will manage the IPO.
Malallah said a feasibility study. conducted prior to the launch of the new company, disclosed some gaps in the capital market that they would like to fill.
“Our study showed that commercial banks are the main source of finance for individuals in need of personal loans. Our investment firm could extend credit facility in that direction.”
Accordingly, the Combined Saudi Co. has been set up to provide core services in terms of retail financing operations in the Kingdom with the active support of Investment Dar which would leverage its knowhow and expertise acquired in the Kuwaiti and other Gulf retail sectors.
“The main objective of our company is to achieve significant returns on investment by applying strategic investment policies across different sectors, and determining investment and trade opportunities from regional partnerships and agreements, which in turn will attract highly qualified professionals and senior managers,” Mallalah observed.
According to Mohammed Al-Dossary, CEO, Al-Dammam Construction Co., other areas where the company would be involved include financing and consulting services, including consumer goods finance, asset management, real estate investments, commercial and residential property management, establishment and acquisition of hotels, hospitals, commercial malls, health care, tourist and entertainment facilities.
The Combined Saudi Co., he pointed out, would also be involved in building commercial and industrial facilities, to be let or sold to third parties, as well as acquiring, managing and re-selling real estate (for cash or installments) and all categories of retail and wholesale business. All its investment activities would be Shariah-compliant.
Mallalah pointed out that the liberalization of the Saudi economy together with the reduced corporate tax has created an environment that is conducive to investment flow.
“There are good investment opportunities in the areas mentioned before. Hence the new company would seek to position itself as a market leader in those sectors in alliance with Investment Dar,” he added.