PIF’s Sanabil Investments increases share capital by 50% to $8bn

The Saudi Arabian Investment Company (Sanabil Investments) on Wednesday announced that its parent company, the Public Investment Fund, had approved increasing its share capital by 50 percent. (Supplied)
The Saudi Arabian Investment Company (Sanabil Investments) on Wednesday announced that its parent company, the Public Investment Fund, had approved increasing its share capital by 50 percent. (Supplied)
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Updated 07 July 2021

PIF’s Sanabil Investments increases share capital by 50% to $8bn

The Saudi Arabian Investment Company (Sanabil Investments) on Wednesday announced that its parent company, the Public Investment Fund, had approved increasing its share capital by 50 percent. (Supplied)
  • The Saudi Cabinet approved the establishment of Sanabil Investments in 2008

RIYADH: The Saudi Arabian Investment Company (Sanabil Investments) on Wednesday announced that its parent company, the Public Investment Fund, had approved increasing its share capital by 50 percent to SR30 billion ($8 billion).

The Saudi Cabinet approved the establishment of Sanabil Investments in 2008. A closed joint-stock company, it originally had a paid-up capital of SR20 billion.

“Sanabil has implemented its new strategy in 2019 to focus on venture capital, growth strategies and small buyouts, from early to more mature stages of the business life cycles,” the company said in a press statement.

In February, Sanabil Investments entered into partnership with the Californian venture capital firm 500 Startups to launch an early stage accelerator program for startups in the Kingdom looking to expand across the Middle East and beyond.

The Sanabil 500 MENA Seed Accelerator Program consists of six programs run by 500 Startups over three years for a group of pre-seed and seed stage startups from across the MENA region. Up to 100 startups are expected to receive investment of up to $100,000.

From around 500 applications, 14 startups from the MENA region, including Saudi Arabia, the UAE, Egypt, Jordan, and Palestine, were chosen to present their companies to an audience of potential investors at a showcase on Wednesday.


Electrified cars hit almost a fifth of EU Q3 vehicle sales

Electrified cars hit almost a fifth of EU Q3 vehicle sales
Updated 7 sec ago

Electrified cars hit almost a fifth of EU Q3 vehicle sales

Electrified cars hit almost a fifth of EU Q3 vehicle sales
LONDON: Nearly one in five vehicles sold in the European Union in the third quarter was an electrified model as sales continued to soar while fossil-fuel cars slumped, according to sales data released on Friday by a trade organization.
The European Automobile Manufacturers’ Association, or ACEA, which represents major European car, truck, van and bus makers, said that battery electric and plug-in hybrid model sales across the European Union made up just under 19 percent of all sales.
Battery electric vehicle sales jumped nearly 57 percent to more than 212,000 units, while plug-in hybrid models rose nearly 43 percent to more than 197,000 units.
This is a slower pace of growth than in 2020 when sales almost trebled from a low base.
But it compares with a 35 percent drop in sales for petrol cars — which still are the biggest sellers and account for nearly 40 percent of overall sales — and a more than 50 percent drop for diesel cars during the quarter.
Less than a decade ago, diesel cars made up more than 50 percent of sale in the EU, but accounted for under 18 percent of all cars sold in the third quarter.
As well as having to meet stringent new EU carbon emissions targets, car makers and consumers have benefited from government subsidies for electric vehicles.
The European Commission has also proposed an effective ban on fossil-fuel vehicles from 2035, aiming to speed up the switch to zero-emission electric vehicles as part of a broad package of measures to combat global warming.

China Evergrande lines up funds for interest payment to avert default — source

China Evergrande lines up funds for interest payment to avert default — source
Updated 4 min 7 sec ago

China Evergrande lines up funds for interest payment to avert default — source

China Evergrande lines up funds for interest payment to avert default — source
  • Company faced end of 30-day grace period for payment on Oct. 23
  • Next 30-day grace period expires Oct. 29 for Sept. 29 payment

HONG KONG/SHANGHAI: China Evergrande Group has supplied funds to pay interest on a US dollar bond, a person with direct knowledge of the matter told Reuters on Friday, days before a deadline that would have seen the developer plunge into formal default.
The person said Evergrande remitted $83.5 million to a trustee account at Citibank on Thursday — as earlier reported on Friday by state-backed Securities Times — allowing it to pay all bondholders before the payment grace period ends on Oct. 23.
News of the remittance will likely bring relief to investors and regulators worried about a default’s wider fallout in global financial markets, adding to reassurance from Chinese officials who have said creditors’ interests would be protected.
Still, the developer, saddled with $300 billion in liabilities, will need to make payments on a string of other bonds, with the next major deadline to avoid default only a week away and little known about whether it is in a position to pay those debts.
“They seem to be avoiding short-term default and it’s a bit of a relief that they have managed to find liquidity,” said a Hong Kong-based debt restructuring lawyer representing some bondholders, who did not want to be identified.
“But still, Evergrande does need to restructure its debt. This payment might be a way for them to get some sort of buy-in with stakeholders before the heavy work needed on the restructuring.”
It was not immediately clear how cash-strapped Evergrande was able to raise funds for paying the bondholders or whether any bondholders have already received the money.
Evergrande did not respond to Reuters’ request for comment. Citibank declined to comment. The person with knowledge of the matter was not authorized to speak with media and so declined to be identified.
News of the remittance comes a day after financial information provider REDD said Evergrande had secured more time to pay a defaulted bond it guaranteed, issued by Jumbo Fortune Enterprises. “This is a positive surprise,” said James Wong, portfolio manager at GaoTeng Global Asset Management, who had expected a default.
The news would boost bondholders’ confidence, he said, as “there are many coupon payments due ahead. If Evergrande pays this time, I don’t see why it won’t pay the next time.”
Evergrande missed coupon payments totalling nearly $280 million on its dollar bonds on Sept. 23, Sept. 29 and Oct. 11, beginning 30-day grace periods for each.
Subsequent non-payment would result in formal default and trigger cross-default provisions for its other dollar bonds.
Evergrande’s next payment deadline is Oct. 29 with the expiration of the 30-day grace period on its Sept. 29 coupon.

TEMPORARY RELIEF
Evergrande’s dollar bond prices surged on Friday, with its April 2022 and 2023 notes jumping more than 10 percent, data from Duration Finance showed, though they still traded at deeply distressed levels of around a quarter of their face value.
Its shares rose as much as 7.8 percent, a day after trade resumed following a more than two-week halt pending the announcement of a stake sale in its property management unit, which was scrapped this week.
Evergrande’s woes have reverberated across the $5 trillion Chinese property sector, which accounts for a quarter of the economy by some metrics, with a string of default announcements, rating downgrades and slumping corporate bonds.
In the latest such move, Fitch Ratings on Thursday cut Sinic Holdings (Group) Co. Ltd’s long-term foreign currency issuer default rating to “restricted default” from “C” as the developer failed to repay its $250 million notes due Oct. 18.
Still, the Evergrande news helped the Hang Seng mainland properties index surge more than 4 percent versus a gain of 0.25 percent in the broader Hang Seng index.
It also helped Evergrande’s smaller peer Kaisa Group Holdings Ltd, whose dollar bonds surged in price.
Kaisa was the first Chinese developer to default back in 2015 and the Evergrande crisis has put it back in the spotlight.
In mainland markets, the CSI300 Real Estate index jumped as much as 6.5 percent, and an index tracking the broader property sector was eyeing its biggest gain in nearly two months.
When asked whether it will step in to help its rival to ease its liquidity crisis, Chairman Yu Liang of the nation’s third-biggest developer, China Vanke Co. Ltd, said developers needed to ensure their own safety first.
“Everyone feels the chill as ‘winter’ arrives for the sector... Whether we can pass this winter safely is still unknown,” Yu told a company forum on Friday.

FREEWHEELING
Evergrande’s woes had been snowballing for months. Dwindling resources set against more than $300 billion of liabilities had wiped out 80 percent of its value.
Founded in Guangzhou in 1996, the developer epitomised a freewheeling era of borrowing and building. But that business model has been scuttled by hundreds of new rules designed to curb developers’ debt frenzy and promote affordable housing.
Analysts said any prospect of demise would raise questions over what would happen to the more than 1,300 real estate projects Evergrande has ongoing in over 280 cities, and any impact the wider property sector.
Bank exposure to developers is also extensive. A leaked 2020 document, branded a fake by Evergrande but taken seriously by analysts, showed the company’s liabilities extending to more than 128 banks and over 121 non-banking institutions.
“Given that we have little clarity on how bank financing is going for stalled real estate projects, but we know that project pre-sales are down a lot, the onshore business is unlikely to be supplying cash to Evergrande near-term,” said analyst Travis Lundy at Quiddity Advisers in Hong Kong.


Renewable energy employed up to 12 million people worldwide in 2020

Renewable energy employed up to 12 million people worldwide in 2020
Updated 11 min 26 sec ago

Renewable energy employed up to 12 million people worldwide in 2020

Renewable energy employed up to 12 million people worldwide in 2020
  • Sector created 500,000 jobs last year

RIYADH: The renewable energy industry created half a million jobs in 2020 so that 12 million people were employed in the sector at the end of the year, according to the International Renewable Energy Agency (IRENA) and the International Labor Organization (ILO).

Solar energy jobs led the way in renewables employment, accounting for 33 percent of jobs, IRENA and the ILO said in a report titled World Energy Transitions Outlook. Liquid biofuels had a 20 percent share of jobs.

“The potential for renewable energy to generate decent work is a clear indication that we do not have to choose between environmental sustainability on the one hand, and employment creation on the other,” ILO Director-General Guy Ryder said in the report. “The two can go hand-in-hand.”

China held the bulk of renewable energy jobs, with 39 percent, followed by Brazil and India, at 10 percent and 6 percent, respectively. Other countries rapidly generating employment in the sector include Vietnam, Malaysia and Indonesia.

The transition to renewable energy will more than offset job losses in traditional energy, the report predicted, with 24-25 million jobs created by 2030 compared with 6-7 million roles lost by the transition.

The report also expects that 43 million people will be working in the renewable energy sector by 2050.


Trump deal delivers $420 million windfall for wondering dealmaker

Trump deal delivers $420 million windfall for wondering dealmaker
Updated 22 October 2021

Trump deal delivers $420 million windfall for wondering dealmaker

Trump deal delivers $420 million windfall for wondering dealmaker
  • Digital World shares ended trading on Wednesday up 357 percent after the deal was announced, giving the firm a market value of close to $1.5 billion

A merger with former US President Donald Trump’s new social media venture has delivered a potential windfall of $420 million for a former finance executive who has been trying for a decade to reinvent himself as a serial dealmaker.
Benessere Capital CEO Patrick Orlando’s stake in Digital World Acquisition Corp, the Miami-based blank-check acquisition firm he is leading, was worth $423 million on Thursday after his deal to merge Trump Media and Technology Group was announced, according to a regulatory filing and Reuters calculations.
Orlando invested only $3 million in Digital World, and is set to receive the windfall because the deal entitles him to additional compensation in shares as sponsor of the firm, the filing shows. Digital World shares ended trading on Wednesday up 357 percent after the deal was announced, giving the firm a market value of close to $1.5 billion.
To be sure, these gains are on paper. The terms of the SPAC do not allow Orlando to cash out until six months after the merger has been completed.
It is nonetheless a remarkable reversal of fortune for the former Deutsche Bank AG derivatives banker who worked in Peru’s biofuel industry and for a US sugar trading company before trying his hand at special purpose acquisition companies (SPACs).
He launched Benessere in 2012 to advise other companies on their deals but it was not until last year that he launched four SPACs with the help of Shanghai-based investment bank ARC Capital.
He struggled to gain traction. One of his SPACs, which was based in Wuhan, China, failed last month to complete a merger with Giga Energy Inc. that would have valued the transportation solutions provider at $7.3 billion, because it could not deliver the cash required, according to regulatory filings.
Orlando did not respond to requests for comment.
Trump Media said it would receive $293 million in cash that Digital World had in a trust if no shareholder of the acquisition firm chose to cash in their shares.
The company said it planned a trial version of its social media app next month and a full roll-out in the first quarter of 2022.


John Kerry to attend Middle East Green Initiative Summit in Saudi Arabia

John Kerry to attend Middle East Green Initiative Summit in Saudi Arabia
Updated 21 October 2021

John Kerry to attend Middle East Green Initiative Summit in Saudi Arabia

John Kerry to attend Middle East Green Initiative Summit in Saudi Arabia
  • Kerry will “engage with government counterparts and private sector leaders on climate crisis

LONDON: US climate envoy John Kerry will travel to Saudi Arabia on Sunday to take part in the Middle East Green Initiative Summit.

During his two-day visit to the Kingdom, Kerry will “engage with government counterparts and private sector leaders on efforts to address the climate crisis,” the State Department said.

Kerry’s meetings will “bolster the United States’ bilateral and multilateral climate diplomacy” ahead of the COP26 climate summit in Glasgow that starts on Oct. 31.

Saudi Arabia will host the inaugural Saudi Green Initiative Forum and Middle East Green Initiative Summit in Riyadh on Oct. 23-25.

The environmental initiatives were launched in March by Crown Prince Mohammed bin Salman. Together they aim to plant 50 billion trees in the region and reduce Middle East carbon emissions by 60 percent.