Saudi-Indonesian partnership eyes construction projects

Updated 31 January 2016

Saudi-Indonesian partnership eyes construction projects

A new agreement for the establishment of a Saudi-Indonesian partnership in the field of contracting and construction was signed
on Saturday.

Indonesia’s PT Wijaya Kriya, a giant in the construction sector, and Adel Mekki Contracting Est. of Saudi Arabia signed the partnership after obtaining the approval of the Saudi Arabian General Investment Authority (SAGIA) to work in the local market.
According to Adil Makki Contracting Est. Executive Chairman Adil Makki, his establishment and PT Wijaya Kraya of Indonesian were in talks for a year because of the many requirements sought by the Indonesian company in the matter of selection of partners around the world.
Makki explained that the term of the contract is ten years from the date of signing, subject to renewal.
“The entry of the Indonesian giant in the construction and contracting sector and such international companies is expected to contribute to the revitalization of this sector and bring in new expertise. This is especially so as companies like PT Wijaya Kraya have achieved outstanding successes in the construction sector not only in Indonesia but also in international markets,” Makki added.
Muammar Atawi, chairman of the contractors committee at Jeddah Chamber of Commerce and Industry (JCCI), said this is the first time that an Indonesian giant in the contracting and construction sector has entered this market.
“This is proof of the vitality of this market and its continued growth with huge projects despite recession in many international markets.”
Sergar, chairman of PT Wijaya Kraya of Indonesia, said he was delighted to enter the Saudi market and establish a strategic relationship with Adil Makki Contracting Est.
He pointed out that the entry of PT Wijaya company Kraya into the Saudi market follows the endorsement of the work undertaken by the Indonesian company in the other Arab, Gulf and international markets.
PT Wijaya Kraya, established in 1960, specialized in the construction of buildings and infrastructure for government, and soon expanded its activities to include various energy and industrial and construction projects.
Its share of the construction market in Indonesian exceeds 35 percent. It has 2,000 engineers and technicians, and more than 20,000 workers.
He claimed the company ranks number one in the construction sector, adding that it has pursued a plan for overseas expansion. Since 2007, it entered the UAE, Algerian and Libyan markets, and has its presence in Myanmar, Malaysia, Brunei and East Timor.
He emphasized that his company’s joint operation in the Kingdom will compete for government projects, especially infrastructure and architecture.
“We expect to win contract bids worth more than $200 million here during 2016,” he said, adding that his company, which has been certified by SAGIA as a foreign investor in 2015, is already studying more than $40 million worth of Saudi projects, including housing and commercial centers.

Aramco shares to make debut as biggest IPO gets bigger

Updated 50 min 19 sec ago

Aramco shares to make debut as biggest IPO gets bigger

  • Samba Capital, NCB Capital and HSBC Saudi Arabia issued a statement late Monday
  • Saudi subscribers were allocated 96.6 percent of the retail offering

LONDON : Saudi Aramco shares make their stock market debut on Wednesday as it emerged that the oil giant could raise even more from its already record-breaking share sale.

Aramco will exercise its 15 percent “greenshoe option” either in part or in whole during the first 30 days of its trading period, its lead managers said.

A greenshoe option is financial jargon for a clause that allows an underwriter the right to sell investors more shares than planned if demand proves higher than anticipated.

Samba Capital, NCB Capital and HSBC Saudi Arabia issued a statement late Monday confirming an earlier report on the Al Arabiya news channel citing an NCB Capital executive.

It means the share sale could generate as much $29.4 billion if exercised fully. The main IPO raised $25.6 billion on Thursday.

Samba Capital said that the IPO was hugely oversubscribed, attracting aggregate subscriptions of SR446 billion, representing coverage of 465 percent.

The listing and trading of the company’s shares on Tadawul starts just four working days after the end of the subscription phase, Samba noted.

The number of individual subscribers was 5.056 million, who bought SR49.2 billion worth of shares.

Saudi subscribers were allocated 96.6 percent of the retail offering with non-Saudis (expatriates and GCC nationals) getting 3.4 percent. 

For the institutional tranche, the final value of subscriptions totaled SR397 billion.

The Saudi Aramco IPO is a key part of the Kingdom’s plan to transform its economy by reducing its reliance on oil, developing its financial markets and attracting increased levels of foreign direct investment.

Saudi Finance Minister Mohammed Al-Jadaan said that the proceeds from Aramco’s IPO would be reinvested, helping to create more revenue channels for the government.

The Aramco IPO is expected to pave the way for more privatizations in the Kingdom.

“Privatization is at the top of the government’s priorities,” Al-Jadaan told reporters on Monday.

“We will continue to support big projects and will continue to support promising projects,” he said. “Enabling the private sector is the top priority of Vision 2030. We have more to come and our journey toward Vision 2030 demands