From Aramco IPO to sustainability: five key takeaways from Saudi Arabia’s FII 2019 conference

Participants at the Future Investment Initiative (FII) summit at the King Abdulaziz Conference Center in Saudi Arabia’s capital Riyadh. (AFP)
Updated 02 November 2019

From Aramco IPO to sustainability: five key takeaways from Saudi Arabia’s FII 2019 conference

  • Virtually every financial panel had some line on the Saudi Aramco IPO, and it was the top dinner-table topic of conversation too
  • One of the mind-boggling facts on offer was that Saudi Arabia has the second-highest level of per capital spend on technology, only behind gadget-crazy Japan

RIYADH: The time has come to hang another Future Investment Initiative badge on the lanyard tree in Kane Castle, and wrap up from Riyadh for another year. That’s three in a row I’ve attended now. If the event is staged in the same form next year (see below) surely I’ll qualify for some kind of loyalty reward — maybe special “light search” status through the airport-type security on each entrance to the Ritz Carlton? Or diner a deux with Pepper the robot?

You can probably tell my mind is wandering, but FII has that effect on you. A combination of early-morning starts, Riyadh rush-hour driving and Ritz Carlton security — followed by the zappy mind blast that is the FII experience — tend to make your train of thought a bit random. So, in an effort to bring some order, here is a list of my five top takeaways from FII 2019.

1. The IPO of Saudi Aramco was by far the hottest topic at the show. From the very first morning, when local media reported that a date had been set for the long-awaited share sale, the question I heard most over the three days was: Is it on? Virtually every financial panel had some line on the IPO, and it was the top dinner-table topic of conversation too. Over the past three years, the future of the Kingdom has become inexorably intertwined with the Aramco IPO. We should not have much longer to wait now.

2. Sustainability has come off the tick-box list and is now being taken seriously by the world’s big decision-makers. In 2017, at the first FII, concerns about climate change and the environment were paid lip-service, but you got the impression it was only to put a cross in the appropriate ESG box. In 2019, many speakers made sustainability the top items in their keynotes, including the Saudi energy minister Abdul Aziz bin Salman with his “circular carbon economy.” There is nothing so potent as an idea whose time has come.

3. The future will be smart, and automated. Aramco was the biggest single conversation topic, but more official time was taken up by technological innovation, artificial intelligence, robotics, digital infrastructure and the rest of the “smart” revolution. One of the mind-boggling facts on offer was that Saudi Arabia has the second-highest level of per capital spend on technology, only behind gadget-crazy Japan. Pepper the robot was only the tip of an iceberg of automated floor cleaners, autonomous cars and more apps than you could imagine existed.

4. It’s still the people that make FII a success. One of the great pleasures of walking the hangar-like halls and corridors of the Ritz Carlton complex is the random meeting. You’re having a quick nicotine fix on the terrace and find yourself beside Masayoshi Son of SoftBank (there purely to get some air and escape the frigid air-conditioning). It’s disconcerting, to say the least. Some of the best meetings begin this way. I randomly bumped into British businesswoman Amanda Staveley, for example, and heard intriguing whispers of big deals ahead the football world. A few candid minutes with former White House communications director Anthony Scaramucci produced some unprintable anecdotes and a firm conviction that Donald Trump would not be president again.

5. There are some serious choices to be made about FII 2020. After a successful third event in which it has established itself as the premier thought-leadership event in the Middle East — living up to the “Davos in the Desert” sobriquet — in 2020 FII will find itself with come serious competition. Next November, the Kingdom will host the G20 gathering of world leaders, perhaps the ultimate event in the global forum space. Is Riyadh big enough for both of them within a few weeks of each other? We shall see.


Cirque du Soleil walks a tightrope through pandemic

Updated 06 June 2020

Cirque du Soleil walks a tightrope through pandemic

  • Suitors wage backstage battle to rescue debt-stricken Canadian circus icon
  • Among the potential bidders is former fire eater Guy Laliberte, who fouded the acrobatic troupe in 1984

MONTREAL: Its shows canceled due to the COVID-19 pandemic, an already heavily indebted Cirque du Soleil’s fight for survival has invited an intense backstage battle to try to save the Canadian cultural icon.

High on a list of potential suitors is former fire eater Guy Laliberte, who founded the acrobatic troupe in 1984 but later sold it.

“Its revival will have to be done at the right price. And not at all costs,” said the 60-year-old, determined not to see his creation sold to private interests.

The billionaire clown said after “careful consideration,” he decided “with a great team” to pursue a bid, but offered no details.

Under his leadership, the Cirque had set up big tops in more than 300 cities around the world, delighting audiences with contemporary circus acts set to music but without the usual trappings of lions, elephants and bears.

Then the pandemic hit, forcing the company in March to cancel 44 shows worldwide, from Las Vegas to Tel Aviv, Moscow to Melbourne, and lay off 4,679 acrobats and technicians, or 95 percent of its workforce.

Hurtling toward bankruptcy, the global entertainment giant and pride of Canada commissioned a bank in early May to examine its options, including a possible sale.

Meanwhile, shareholders ponied up $50 million in bridge financing for its “short-term liquidity needs.”

Laliberte, the first clown to rocket to the International Space Station in 2009, ceded control of the Cirque for $1 billion in 2015.

It has since fallen into the hands of American investment firm TPG Capital (55 percent stake) and China’s Fosun (25 percent), which also owns Club Med and Thomas Cook travel. The Caisse de depot et placement du Quebec (CDPQ) retains the last 20 percent.

The institutional investor, which manages public pension plans and insurance programs in Quebec, bought Laliberte’s last remaining 10 percent stake in the business in February, just before the pandemic.

Since 2015, the Cirque has embarked on costly acquisitions and renovations of permanent performance halls, while its creative spirit waned, according to critics in the Quebec press.

Meanwhile, it piled on more than $1 billion in debt.

Fearing that the Cirque would be “sold to foreign interests,” the Quebec government recently offered it a conditional loan of $200 million to help relaunch its shows as restrictions on large gatherings start to be eased worldwide.

But the agreement in principle is conditional on the Cirque headquarters remaining in Montreal and the province being allowed to buy US and Chinese stakes in the company at an unspecified time in the future, “at market value” and with “probably a local partner,” said Quebec Minister of the Economy Pierre Fitzgibbon.

“The state does not want to operate the circus, but the circus is too important to Quebec (to leave it to foreigners),” he said.

In addition to Laliberte, other prospective buyers include Quebecor, the telecoms and media giant of tycoon Pierre Karl Peladeau, whose opening lowball bid was outright rejected.

“It is essentially the value and reputation of the brand” that has piqued interest in the company, says Michel Magnan, corporate governance chair at Concordia University in Montreal.

But “as long as there are restrictions on gatherings of people, the future is not very rosy” for the Cirque, he said.

Several challenges await, according to Magnan.

“There were a lot of people working in all of these shows. Where are they now? What are they doing? How are they doing? In what shape are they, what state of mind?” he said.

“The more time passes, the more this expertise risks evaporating.”

Small consolation: The Cirque resumed its performances on Wednesday in Hangzhou, China, five months after a coronavirus outbreak in the city.