Newcastle deal a sign of UK-Saudi business partnership, says British envoy

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Updated 18 November 2021

Newcastle deal a sign of UK-Saudi business partnership, says British envoy

Newcastle deal a sign of UK-Saudi business partnership, says British envoy
  • Ken Costa says new Alvarium Tiedmann group is looking at Riyadh as a possible location for a regional headquarters

RIYADH: One of the leading advocates of stronger relations between Saudi Arabia and Britain believes the opposition expressed in some parts of the UK over the takeover of Newcastle United Football Club is just  “noise.”

Ken Costa, the former investment banker who has been Prime Minister Boris Johnson’s special envoy for the past three years, told Arab News: “It’s a competitive world. You see a strong player coming into your market, what do you want to do? You want to create noise. A lot of it is noise, a lot of it is trying to find reasons why it (the takeover) couldn’t happen, but it has happened.”

Costa was speaking on the sidelines of the FII forum in Riyadh, which he was attending as part of the British delegation. He said that the Newcastle deal — by a consortium 80 percent controlled by the Saudi sovereign wealth fund, the PIF, was a good thing for the economy of the northeast of England.

“There is a very real possibility of welcoming Saudi investment into a part of the UK to create jobs to be able to be working in and around something where people can really identify with, which is football and the football club. It’s a positive thing for the fans and for football generally,” he added.

Costa was a high-profile investment banker in London for decades, but since leaving the chairmanship of Lazards he has been focusing on investment management for high net worth individuals, most recently as co-chairman of Alvarium Investments, which has just merged with the Tiedmann group to form a $1.4 billion investment management group.

In 2018, he was appointed as special envoy to Saudi Arabia when the current prime minister was foreign secretary,  and has been involved in some of the big recent transactions between the Kingdom and the UK.

“I have been the special representative of the prime minister for the last three years and, coming to the end of that, I have been able to see the extraordinary depth of the commitment between the two countries.

“With Invesment Minister Lord Grimstone leading the initiatives here we have got a real opportunity of being able to see capital flowing — intellectual capital but also real capital, coming from the Kingdom into the UK and vice versa,” he said.

Costa cited the £20 billion investment by PIF into Britain as an example of the kind of transaction that is likely to come from a new spirit of partnership between the two countries. 

“It’s very good at the moment and of course there is a long history of good personal relationships between the people of the Kingdom and Britain,” he added.

Costa was active in the campaign to get Saudi Aramco to list on the London Stock Exchange, which was eventually dropped when the Saudi oil company decided to go for a purely domestic listing. But, with suggestions that more shares might be sold, he still believes the UK capital is the natural place, despite concerns by some investors about backing hydrocarbon-based businesses.

“I think that there is an investment case and London is the obvious place. It is the deepest capital market and it is the global capital market. So let’s hope for that,”

The new Alvarium Tiedmann group will list on a public stock market some time soon, Costa said. He is considering whether to set up a permanent office in the Middle East, and is looking at Riyadh as a possible location for a regional headquarters.

Costa is looking to tap into the huge funds which will change hands between generations in the next few years, which some experts believe will amount to $100 trillion worth of wealth in the US alone over the next decade.

“That’s very exciting because this next generation has really got their values clearly focused on being environmentally friendly and in particular inclusive capitalism and that makes a difference.

“This is a generation that not only sees these values but has actually got the financial capital to be able to affect these changes.” 


Jordan to begin oil exploration in two areas in February, energy minister says

Jordan to begin oil exploration in two areas in February, energy minister says
Image: Shutterstock
Updated 5 sec ago

Jordan to begin oil exploration in two areas in February, energy minister says

Jordan to begin oil exploration in two areas in February, energy minister says

Jordan will begin oil exploration in two areas, Al-Jafr and Al-Sarhan, in February, the country's energy minister Saleh Al-Kharabsheh said on Tuesday, as reported by Jordan state television. 


Vingroup tapping global investors for car unit’s $1bn funding: sources

Vingroup tapping global investors for car unit’s $1bn funding: sources
VinFast a member company of Vingroup. Image: Shutterstock
Updated 15 min 46 sec ago

Vingroup tapping global investors for car unit’s $1bn funding: sources

Vingroup tapping global investors for car unit’s $1bn funding: sources
  • If successful, it is likely to end up as Vietnam’s largest private fundraising

Vietnam’s largest conglomerate Vingroup is in talks with investors, including Qatar’s sovereign fund and BlackRock, to raise about $1 billion in equity for its car unit, three sources aware of the matter said.


The fundraising exercise comes as VinFast, Vingroup’s automobile arm, is betting big on the US market, where it hopes that its electric SUVs and a battery leasing model will be enough to woo consumers away from the likes of Tesla and General Motors.


If successful, it is likely to end up as Vietnam’s largest private fundraising, underscoring heightened investor interest in Southeast Asia, a region where ride-hailing and delivery giants Grab and GoTo have raised billions of dollars.


The fundraising move also shows electric vehicle projects remain a major draw for investors.


“Electric vehicles are the topic of the year and there’s huge investor interest,” said one of the sources.


Vingroup is in discussions for the fundraising ahead of VinFast’s potential US listing that could take place as early as next year, said the sources, who declined to be identified as negotiations are still ongoing.


They said the company could finalize the private fundraising deal as early as next month. Vingroup is also in talks with global private equity firms.


The sources said Vingroup is in advanced talks with Qatar Investment Authority (QIA), the country’s $300 billion sovereign wealth fund, which has been diversifying its investments from its core European and US markets toward Asia.


BlackRock is the world’s largest asset manager.


Vingroup declined to comment while there was no response from QIA. BlackRock did not immediately respond to a request for comment.


VinFast plans a US listing within the next couple of years, its chief executive told Reuters earlier this month, aiming to join a growing list of electric vehicle startups that have taken advantage of investor enthusiasm and raised money.


Two sources told Reuters that VinFast was sticking to a previous plan of either listing via a special purpose acquisition company (SPAC) or making a standalone listing.


VinFast, established in 2017 as part of Vingroup, plans to start producing electric cars in the United States in the second half of 2024. It unveiled two electric sport utility vehicles, VF e35 and VF e36, at the Los Angeles Auto Show this month. 


Emirates airline could float on Dubai stock market: Company president

Emirates airline could float on Dubai stock market: Company president
Updated 12 min 24 sec ago

Emirates airline could float on Dubai stock market: Company president

Emirates airline could float on Dubai stock market: Company president
  • The airline posted a loss of 5.8 billion dirham from April to September, down from a 12.6 billion dirham loss for the same period last year.

DUBAI: The Dubai government is considering an initial public offering of Emirates airline, the flagship carrier’s President Tim Clark said on Monday, as authorities work to boost activity on the local stock market.

The emirate’s government is planning to list 10 state-backed companies on its stock exchange and set up a 2 billion dirham ($545 million) market maker fund to encourage trading activity.

“Yes, there has been talk about it. Yes, there has been, perhaps a little bit more flesh on the whole subject than there has been in the past,” Clark said in an interview for the upcoming Reuters Next conference when asked if a listing was a possibility.

“I’m waiting instructions as to how this is going to affect the Emirates Group. What the government of Dubai decides to do...is up to them, I would basically do as I am bid.”

Emirates Chairman Sheikh Ahmed bin Saeed Al-Maktoum said earlier this month that it was possible to list the carrier or its subsidiaries.

Governments have pumped billions of dollars into airlines during the coronavirus pandemic and state-owned Emirates has received around $3.8 billion in equity injections from Dubai, including $2 billion disclosed last year.

The airline posted a loss of 5.8 billion dirham from April to September, down from a 12.6 billion dirham loss for the same period last year.

However, Clark said he does not expect further government support over the next year so long as the new variant of the coronavirus does not cause too much disruption.

“We are restoring our cash position at pace. So it is unlikely, notwithstanding the omicron variant and its effects... if it’s not as bad as people think it may be, then we see no further recourse to the owner putting equity into the business.

Clark said that although Emirates would still suffer a loss this year, it would be considerably smaller than in the preceding 12 months. For 2022, he expected the airline to break even or make a profit.

“I am very pleased to say we have returned to profitability already, over the last six, seven weeks, we’ve been profitable,” he said.

— Reuters


Emirates warns omicron could cause ‘significant traumas’ for aviation industry

Emirates warns omicron could cause ‘significant traumas’ for aviation industry
Image: Shutterstock
Updated 25 min 12 sec ago

Emirates warns omicron could cause ‘significant traumas’ for aviation industry

Emirates warns omicron could cause ‘significant traumas’ for aviation industry
  • However, he said bookings generally remained strong despite the reintroduction of measures in some European markets

DUBAI: A major hit to the peak December travel season because of the omicron variant of the coronavirus would cause “significant traumas” in the global aviation business, Emirates airline President Tim Clark said on Tuesday.

Clark said Emirates was working on the basis the newly discovered variant could be dealt with effectively by vaccines, but acknowledged the next few weeks would prove critical for the industry as scientists assess the risks.

“I would say probably by the end of December, we’ll have a much clearer position,” Clark said in an interview for the Reuters Next.

“But in that time, December is a very important month for the air travel business,” he added. “If that is lost, or the winter is lost to a lot of carriers, there will be significant traumas in the business, certainly the aviation business and the periphery.”

The World Health Organization (WHO) warned on Monday that the heavily mutated omicron coronavirus variant is likely to spread internationally and poses a very high risk of infection surges that could have “severe consequences” in some places.

omicron was first reported on Nov. 24 in southern Africa, where infections have risen steeply. It has since spread to more than a dozen countries, many of which have imposed travel restrictions to try to seal themselves off.

Japan on Monday joined Israel in saying it would close its borders completely to foreigners.

“It’s likely to arrest, inhibit, but not stall the uptick in demand that we’ve all had the benefit of in the last month or two,” Clark said.

He noted, however, that it could also “go the other way,” with more draconian measures in response to a greater threat from the variant.

Clark said the airline’s decision to close down flights out of South Africa and a handful of surrounding countries was difficult, given strong demand for the December period.

However, he said bookings generally remained strong despite the reintroduction of measures in some European markets such as track and trace, quarantine and PCR testing.

“People haven’t made that decision to cancel or pull off, so we’re hoping that it doesn’t worsen, that the border procedures for re-entry are not so draconian that it prevents them from traveling at all,” he said.

Emirates Chief Executive Sheikh Ahmed bin Saeed Al-Maktoum said just two weeks ago at the Dubai Airshow that the airline planned to deploy a further 60 A380s in response to improving demand, adding to the 47 currently in operation.

“That will be tempered by whatever form this variant takes,” Clark said on Monday. “If it’s mild and its accepted as being mild in its effect and the efficacy of the vaccine shield is able to deal with it, then we hope to have all our aircraft flying, including all the 380s by the summer of next year.”

Clark said re-embedding cabin crews, pilots and engineers and re-training them for safety and other procedures was currently the “greatest inhibiter” for the airline.

“We are continuing to move as if this variant will be dealt with,” he said. “If it isn’t ... we will retard our plans accordingly.”


OPEC+ meets under pressure from Biden and omicron

OPEC+ meets under pressure from Biden and omicron
Image: Shutterstock
Updated 27 min 41 sec ago

OPEC+ meets under pressure from Biden and omicron

OPEC+ meets under pressure from Biden and omicron
  • The meeting "is shaping up to be one of the most significant since the pandemic demand recovery began

OPEC+ oil producers meet Thursday under pressure from US President Joe Biden, who has opened up his country’s taps hoping to bring down crude prices, and a new COVID-19 variant that has complicated the equation.

The meeting “is shaping up to be one of the most significant since the pandemic demand recovery began, and the key signal will be how much more oil will be added to supply to start the new year,” said Peter McNally, an analyst at the Third Bridge think tank.

After coming under heavy pressure to step up production, leading members the United States, China, India and Japan last week announced that they would dip into their strategic reserves to help bring down crude prices, after a surge that has undermined economic recovery.

Biden called it a “major initiative”, with analysts estimating the injection at between 65 and 80 million barrels, including 50 million from the United States alone.

But the move did not have the desired effect, with prices rising regardless — followed by the damper on prices caused by the emergence of the new omicron variant of COVID-19.

The detection of the new variant on Thursday caused crude prices to plunge more than 10 percent, a first since the nightmarish drops of April 2020.

Carsten Fritsch of Commerzbank said “there is much to suggest that OPEC+ will not initially step up its oil production any further” in an effort to maintain current prices at around $70 a barrel.

Such a decision comports with the cautious approach seen since OPEC+ countries began slowly boosting supplies.

Saudi Energy Minister Prince Abdulaziz bin Salman warned in late October against complacency.

The group said earlier this month it planned to boost output by 400,000 barrels per day in December, despite a room for manoeuvre that is 10 times greater.

Russian Deputy Prime Minister Alexander Novak, the Kremlin’s oil pointman, warned Monday against any “hasty decisions”, according to Russian news agencies.

A technical meeting was set for Tuesday ahead of the summit but was postponed to Thursday as experts seek more information on the “current situation”, Novak said.

Iran’s possible re-entry into OPEC will be another key element in the supply calculus.

Iran was sidelined from OPEC in 2018 when then US president Donald Trump pulled Washington out of the 2015 nuclear accord with the Islamic republic.

After a five-month hiatus, negotiations resumed Monday in Vienna.

While most analysts are pessimistic about the outcome, Bjarne Schieldrop of Swedish bank SEB said: “Getting Iranian oil production and exports back on track is probably the best option for President Joe Biden to ease the current oil market tightness.”

Iran produced nearly four million barrels a day in 2017 — an output that dropped to around two million barrels per day last year.