Saudi Arabia, Russia fund ‘to invest over $2bn this year’

Kirill Dmitriev CEO of Russian Direct Investment Fund attends the Future Investment Initiative last year. (AFP/File photo)
Updated 07 June 2019

Saudi Arabia, Russia fund ‘to invest over $2bn this year’

  • Kirill Dmitriev, head of the Russian Direct Investment Fund, said it expects to conclude a deal with Saudi Aramco to acquire a stake in Novomet
  • The RDIF has also offered 30 investment projects in the Russian petrochemical sector to Tadawul-listed Saudi Basic Industries Corp

LONDON: The head of Russia’s sovereign wealth fund says it plans more than $2 billion of investments with Saudi Arabia this year.

Kirill Dmitriev, head of the Russian Direct Investment Fund (RDIF), also said it expects to conclude a deal with Saudi Aramco to acquire a stake in Novomet, the oil equipment manufacturer.

“Overall, RDIF and Saudi partners are looking at 25 new projects and are planning to invest over $2 billion this year, and expect to conclude the deal for Novomet,” he told the Argaam news outlet.

The RDIF has also offered 30 investment projects in the Russian petrochemical sector to Tadawul-listed Saudi Basic Industries Corp. (SABIC). 

“Three projects have been selected for review by SABIC, and one will be reviewed by their investment committee in the coming weeks,” Dmitriev stated.

The fund is also looking into a project with Russia’s SIBUR to build a rubber plant in Saudi Arabia, he added.

Dmitriev welcomed investment from the Kingdom in Russia’s development, like the 2015 agreement with the RDIF to invest $10 billion in various projects.

“We are inviting Saudi and international investors to invest in Russia’s national projects, as part of an initiative launched by President Vladimir Putin aimed at modernizing the Russian economy, similar to Crown Prince Mohammed bin Salman’s Vision 2030 program.”

Dmitriev was speaking ahead of the annual International Economic Forum in St. Petersburg, Russia, which starts on Thursday. 

A significant delegation from Saudi Arabia, led by Energy Minister Khalid Al-Falih, is expected at the event. 

 


STC postpones its acquisition of Vodafone Egypt for second time

Updated 13 July 2020

STC postpones its acquisition of Vodafone Egypt for second time

  • Kingdom’s largest telecom company says it will need an additional two months to complete the deal

CAIRO: The Saudi Telecom Company (STC), the Kingdom’s largest telecom company, said that it will need an additional two months to complete a deal to purchase a 55 percent stake in Vodafone Egypt.

In January, STC was in agreement to buy the stake for $2.4 billion. In April, it extended the process for 90 days due to logistical challenges stemming from the spread of COVD-19. The company said in a statement that it would extend the period again to September for the same reason.

The Public Investment Fund, the Saudi sovereign wealth fund, owns a majority stake in STC. The ownership of Vodafone Egypt is divided between 55 percent for Vodafone International, which is the target percentage of the Saudi purchase offer, 44.8 percent for Telecom Egypt, and the remaining 0.2 percent for small shareholders.

Telecom Egypt is awaiting the results of Vodafone’s evaluation of the final share price to announce its position on the deal. A Telecom Egypt official stated that the company is still awaiting STC’s position regarding the purchase of the share. If the deal is not completed, it may be presented with its rights to acquire Vodafone’s share, which would allow it to take over 99.8 percent of the company’s shares, leaving 0.2 percent for small investors.

Ashraf El-Wardany, an Egyptian communications expert, pointed out the importance of waiting until the procedures between STC and the Vodafone Group are complete. The results will determine the next steps by Telecom Egypt.

El-Wardany said that the Saudi operator must, after completing the relevant studies, submit a final binding offer at the share price and any conditions for purchase. If approved by Vodafone, it must submit the offer with the same conditions and price to Telecom Egypt, provided that the latter responds within a maximum period of 45 days to determine its position regarding the use of the right of pre-emption and the purchase, or lack thereof, of Vodafone’s share.

According to El-Wardany, there are other possible scenarios. Vodafone International may not be convinced of the offer or the conditions presented by the Saudi side and the sale may be withdrawn, or the Vodafone group may be ready to sell and has prepared another buyer for its stake in Egypt in the event of rejecting the Saudi offer. It may also it back away from the deal and continue to operate in Egypt for a few more years.

El-Wardany said that if Telecom Egypt decides not to use the right of pre-emption to acquire the remaining Vodafone shares for any reason, it will continue with its 44.8 percent stake.
It may also resort to selling all of its shares or part of it to the Saudi side or to any company that wants to acquire its stake.

“This raises the question of whether STC can acquire all of Vodafone’s shares,” El-Wardany said, adding that the coming months “will make the answer clear.”