The Red Sea Project CEO Pagano doesn’t rule out an IPO within five years

The Red Sea Project CEO Pagano doesn’t rule out an IPO within five years
John Pagano, CEO of The Red Sea Development Company and AMAALA. (Arab News photo)
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Updated 28 October 2021

The Red Sea Project CEO Pagano doesn’t rule out an IPO within five years

The Red Sea Project CEO Pagano doesn’t rule out an IPO within five years

RIYADH: The CEO of The Red Sea Development Company has refused to rule out the possibility of selling a stake in the company, or one of its subsidiaries, to the public in an initial public offering within two to five years, once the company is fully operational and stable.

“We have a number of different ideas as to how we take the business forward,” John Pagano told Arab News in an interview on Wednesday on the sidelines of the Future Investment Initiative Forum in Riyadh. “We can IPO the whole business, we can IPO parts of the business or we can look at different types of structure.

“So we could create a real-estate investment trust and sell the assets into the REIT, (and) we could own part of (the REIT) and open it up to large numbers of retail investors. I think that’s a very attractive proposition but a number of different options exist.”

The Red Sea Project is fully owned by Saudi Arabia’s Public Investment Fund, and Pagano said his company “is very well advanced” in terms of capital needs. The capital structure for the first phase of the project is already in place and the shareholder has committed the equity needed for this initial phase of development, he added.

The PIF has committed about $15 to $16 billion to the project, and last year the TRSDC was able to raise SR14.12 billion ($3.8 billion) in green bonds through a project-financing scheme for the first phase of development, Pagano said, adding: “So the Red Sea is fully capitalized.”

Talking about the recent merger between TRSDC and AMAALA, another megaproject owned by the PIF, Pagano said that they will remain distinct in terms of identity, branding and focus but will share characteristics in terms of sustainability.

“AMAALA was going to go down a different path for their own power and we’ve changed that,” he explained. “So we are going follow a similar approach with the public-private partnership to build the 100 percent renewable-energy system for them, too.

“They, too, can be sustainable and that was not the case before, so it is really leveraging opportunities where we use our respective skill set to make both destinations better.

“We will keep them distinctively apart because they are different and unique. AMAALA is very much focused on wellness and the Red Sea is much more focused on ecotourism and nature, so I think they have very separate, very different, positioning and will have to be coexist. We are not building that many hotels that I would be worried about it.”

Turning to sustainability, Pagano said that they are using the platform provided by the Red Sea Project to really drag the industry along with them.

“I think that by us doing what we doing, people will have to follow,” he added. “If they don’t follow they will not succeed because I think the consumers of today, both before and especially after COVID, are much more aware of the choices they make, and they are going to be much more aware of the environmental impact and they are going to choose to go to destinations that respect the environment, that protect the environment, that go beyond sustainability.

“We’re saying sustainability is no longer enough and we need to think about regeneration, we need to think about how to make our place better — and that is what the Red Sea is doing and we are going to do the same thing for AMAALA.”


Bitcoin continues to decline from its high in November: Crypto wrap

Bitcoin continues to decline from its high in November: Crypto wrap
Updated 10 sec ago

Bitcoin continues to decline from its high in November: Crypto wrap

Bitcoin continues to decline from its high in November: Crypto wrap

RIYADH: Bitcoin, the leading cryptocurrency, plunged around 30 percent from the year’s high of $69,000 on Nov. 10.

It, however, traded higher on Sunday, rising by 2.82 percent to $48,972 at 5:14 p.m. Riyadh time.

Ether, the second most popular cryptocurrency, traded at $4,140 up 4.16 percent, according to data from CoinDesk.

“Corrections and declines do occur in almost all markets including crypto. The current decline is considered the largest in terms of market value since the late March 2020 decline,” Abdullah Mashat, managing director of a private Saudi retail company told Arab News.

Mashat said: “Current decline is due to investors being concerned of tapering talks in the US, which resulted in the decline in stock exchanges and later this caused liquidity crunch in the crypto markets."

Anto Paroian, COO at crypto hedge fund ARK36 said: “The market sentiments  have decisively soured as a result of deepening concerns about omicron variant and its (likely) effect on the economy. The current situation resembles closely what happened in March 2020 as we’re seeing equities plunge 5 percent off recent highs and the negativity is spreading to other markets as well including the digital asset markets. 

“On the other hand, the current price levels aren’t unexpected after the bulls failed to flip the $60,000 resistance multiple times in the past few weeks. During previous Bitcoin bull markets violent swings of 20-30 percent happened a few times before the market topped and let’s remember what happened in July - and how well the market rebounded afterward."

 "It must be noted, though, that one of the key Bitcoin bull market indicators — the 20-week simple moving average — has now been decisively breached so the outlook is currently bearish in the short to medium term. What’s more, since there are widespread expectations that interest rates will rise as central banks are signaling a more aggressive stance on inflation, the violent price move in the digital asset market may also suggest that some investors are preparing to go into a risk-off mode for the time being," Paroian added.

Meanwhile, El Salvador President Nayib Bukele said the Central American country had acquired an additional 150 bitcoins after the digital currency’s value slumped again, enlarging his bet on the cryptocurrency despite criticism.

Bukele said last week that El Salvador had acquired 100 additional coins to take advantage of the currency weakening.


Aramco enters Saudi lubricants market with new product line

Aramco enters Saudi lubricants market with new product line
Updated 21 min 47 sec ago

Aramco enters Saudi lubricants market with new product line

Aramco enters Saudi lubricants market with new product line

RIYADH: Saudi Aramco on Sunday announced its entry into the Kingdom’s domestic lubricants market with the launch of a new line of products.

The oil giant timed the ORIZON® launch to coincide with the inaugural Saudi Arabian Formula 1 Grand Prix in Jeddah.

The product line has been introduced in more than 20 cities including Riyadh, Jeddah and Dammam with more locations planned. The products include synthetic and semisynthetic lubricants for gasoline engines and heavy-duty diesel engines, as well as driveline products, greases and brake fluids. 

The company has also expanded the brand to include ORIZONPRO® which is a high-performance line for the industrial sector.

Yasser M. Mufti, Aramco vice president of fuels, said: “Entering the lubricants market is an important milestone for the company, as we continue to expand our presence throughout the downstream value chain.” 

The launch “further complements Aramco’s presence in the Kingdom’s downstream direct-to-consumer segment, following the inauguration of our first two service stations in Riyadh and Saihat recently.”


Countries tackle economic woes amid omicron fears, revised growth outlooks: Economic wrap

Countries tackle economic woes amid omicron fears, revised growth outlooks: Economic wrap
Updated 29 min 31 sec ago

Countries tackle economic woes amid omicron fears, revised growth outlooks: Economic wrap

Countries tackle economic woes amid omicron fears, revised growth outlooks: Economic wrap

CAIRO: The Australian government is expected to raise its economic growth forecast for 2022 in its midyear budget review, according to the country’s treasurer, Josh Frydenberg.

He said omicron’s effect, the new COVID-19 variant, is still unclear.

The country’s fiscal year runs until June.

The Australian economy narrowed by 1.9 percent in the third quarter of this year on the back of the delta variant which led to a national lockdown.

However, the treasurer said the country now enjoys one of the highest vaccination rates in the world, boosting market conditions.

France avoids more restrictions

France will try to refrain from the imposition of any health-related restrictions even as virus cases continue to rise, the country’s Finance Minister Bruno Le Maire said.

France is also avoiding any mandatory vaccination campaigns, Bloomberg reported, citing the minister.

He said two sectors, restaurants and hospitality, were particularly hit by the wave of new cases, adding that they will receive government support.

He also stated the new variant, omicron, is yet to have an effect on the country’s economic growth.

US growth rate

Unlike other countries, US expected growth rates for both 2021 and next year were trimmed down by Goldman Sachs, one of the world’s leading investment banks. 

It said this downward revision was attributed to a potential adverse effect by omicron, according to Bloomberg.

The world’s largest economy is now predicted to grow by 3.8 percent in 2021, instead of the previous 4.2 percent forecast. As for next year, the US is set to expand by 2.9 percent, down from 3.3 percent.

Meanwhile, the country’s unemployment rate plunged to a 21-month low to hit 4.2 percent in November, according to the Labor Department. This is a 2.1 percent drop compared to January’s level, a considerable decline.

However, employment growth slowed down during the month.

The economy is still expected to experience strong growth in the fourth quarter, following the previous quarter’s weak performance.


ENGIE pulls out of a $3bn Qatar project amid global supply chain disruptions: Al Arabiya

ENGIE pulls out of a $3bn Qatar project amid global supply chain disruptions: Al Arabiya
Updated 05 December 2021

ENGIE pulls out of a $3bn Qatar project amid global supply chain disruptions: Al Arabiya

ENGIE pulls out of a $3bn Qatar project amid global supply chain disruptions: Al Arabiya

A coalition led by the French power utility company ENGIE has withdrawn from competing for a $3 billion Qatari project that aims to build a power and water desalination plant.

This happens as uncertainty about the prices of future projects lingers amid the disruption of global supply chains, Al Arabiya reported citing sources. 

The withdrawal came as investment feasibility was lower than the original plan and the responsible party’s refusal to amend the terms of the contract, the report said.

Sources added the withdrawal means the Japanese investment company Marubeni alliance has won the project.

Qatar’s new project aims to produce electricity from gas with a capacity of 2.5 GW and desalinate over 100 million gallons of water per day.

 


Saudi Arabia raises January Arab Light crude prices to Asia

Saudi Arabia raises January Arab Light crude prices to Asia
Image: Shutterstock
Updated 05 December 2021

Saudi Arabia raises January Arab Light crude prices to Asia

Saudi Arabia raises January Arab Light crude prices to Asia

Saudi Arabia's state oil producer Aramco raised its January official selling price to Asia for its flagship Arab Light crude to $3.30 a barrel versus Oman/Dubai crude, up $0.60 from December, the company said on Sunday.

The company set the Arab Light OSP to Northwestern Europe at minus $1.30 per barrel versus ICE Brent and to the United States at plus $2.15 per barrel over ASCI (Argus Sour Crude Index).