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.”


Saudi Arabia to start mandatory e-invoicing first phase on Dec. 4

Saudi Arabia to start mandatory e-invoicing first phase on Dec. 4
Updated 03 December 2021

Saudi Arabia to start mandatory e-invoicing first phase on Dec. 4

Saudi Arabia to start mandatory e-invoicing first phase on Dec. 4

RIYADH: Saudi Arabia will start implementing the mandatory application of the first phase of e-invoicing “fatoorah” on Saturday Dec. 4, Argaam reported.

An e-invoice, according to regulations, is a tax invoice that is issued electronically by each taxpayer subject to value-added tax in the Kingdom

The first phase requirements consist of ensuring that there is a technical e-invoicing solution compatible with the relevant requirements. This means no handwritten invoices or invoices written through text editors or number analysis applications on computers.

A fine of SR5,000 ($1,332) will be applied for not issuing and saving the invoices electronically.

The fine for not including the QR Code in the e-invoice and not reporting any malfunction in the issuing of the e-invoice to the authority starts with a warning. The fine for violating the deletion or modification of e-invoice starts from SR10,000.

The second phase of e-invoicing will be implemented in a phased manner, starting from January 1, 2023, to establish integration between e-systems of taxpayers and the authority’s regulations, Argaam said.


Bank of England hawk mulling pause on interest rate hike vote due to omicron: Reuters

Bank of England hawk mulling pause on interest rate hike vote due to omicron: Reuters
Updated 03 December 2021

Bank of England hawk mulling pause on interest rate hike vote due to omicron: Reuters

Bank of England hawk mulling pause on interest rate hike vote due to omicron: Reuters

LONDON: Bank of England policymaker Michael Saunders, who voted for an interest rate hike last month, said on Friday he wanted more information about the impact of the new omicron coronavirus variant before deciding how to vote this month.

Saunders said omicron might slow Britain’s economy but it could also add to inflation pressures if it led to people spending more money on goods, when supply chains are already strained, than on going out or on other services.

“At present, given the new omicron COVID variant has only been detected quite recently, there could be particular advantages in waiting to see more evidence on its possible effects on public health outcomes and hence on the economy,” Saunders said in a speech.

Sterling fell on the comments by Saunders which investors took as reducing the likelihood of the BoE raising rates from their current all-time low of 0.1 percent on Dec. 16, at the end of this month’s meeting.

Investors were pricing in only a 33 percent chance of a December rate hike after the speech, down from about 75 percent last week before news broke of the new variant.

The British central bank upended bets by investors on a rate hike on Nov. 4 when it said it wanted to wait for more data on whether the end of the government’s job protecting furlough scheme had led to a jump in unemployment.

Saunders said there did not appear to have been a big hit to the labor market and there were risks from delaying a rate hike too long because that could lead the labor market to tighten further and push up already high inflation expectations.

“This could require a more abrupt and painful policy tightening later,” Saunders said. “For me, the balance between these considerations is likely to be a key factor at the December meeting.”

He said the rates were likely to rise over the next few quarters, assuming the economy behaves as expected.

In a question-and-answer session after his speech, the former Citi economist declined to give a steer on his likely decision at this month’s meeting.

“I don’t want to use code words today to indicate either way as to what my vote at the December meeting might be. There are potential costs and benefits to waiting for more data,” he said.

Saunders and Deputy Governor Dave Ramsden were the two members of the BoE’s nine-strong Monetary Policy Committee who cast votes in early November to raise Bank Rate to 0.25 percent from its pandemic emergency, all-time low of 0.1 percent.

— Reuters 


Twitter Founder Dorsey points to blockchain future with Square rebrand: crypto wrap

Twitter Founder Dorsey points to blockchain future with Square rebrand: crypto wrap
Updated 03 December 2021

Twitter Founder Dorsey points to blockchain future with Square rebrand: crypto wrap

Twitter Founder Dorsey points to blockchain future with Square rebrand: crypto wrap
  • Dorsey hints at future direction of company with reference to blockchain

LONDON: Just days after stepping down from his role as CEO of Twitter, Jack Dorsey is ringing the changes at Square, the other major company he founded, which has changed its name to Block.

While Dorsey is a renowned crypto enthusiast, the rebrand is not all about the blockchain, according to the company: “The name has many associated meanings for the company — building blocks, neighborhood blocks and their local businesses, communities coming together at block parties full of music, a blockchain, a section of code, and obstacles to overcome,” Square said in a statement.

The new name for the holding company, which comes into effect around Dec. 10, does not reflect any organizational changes within the business, and its subsidiaries – Square, peer-to-peer payment service Cash App, music streaming service Tidal and its bitcoin-focused financial services unit TBD54566975 – will keep their brands.

The move comes just over a month after another Silicon Valley stalwart, Facebook, changed its name to Meta, for similar reasons: Mark Zuckerberg no longer wanted the range of brands, including Instagram, WhatsApp and its virtual reality headset Meta Quest (formerly Oculus), to sit under the umbrella of another company in the stable. It also gave Zuckerberg an opportunity to position the company for what he sees as the future: the Metaverse.

Dorsey sees a future dominated by cryptocurrencies. The single hashtag on his Twitter bio reads #bitcoin and he has invested a sizeable chunk of Square’s cash in the biggest cryptocurrency.

Square bought $50 million of bitcoin even before the wave of institutional interest that propelled the digital currency’s price to record highs this year. In February, it further raised its wager and invested another $170 million in it.

Square has also been weighing the creation of a hardware wallet for bitcoin to make its custody more mainstream.

At a Miami conference in June, Dorsey told the thousands of attendees: “If I weren’t at Square or Twitter, I’d be working on bitcoin.”

Square has a division devoted to working on projects and awarding grants with the aim of growing bitcoin’s popularity globally. Even at Twitter, he began pushing the decentralization project, including creating a team to construct a decentralized social media protocol, which will allow different social platforms to connect with one another, similar to the way email providers operate.

Twitter allows users to tip their favorite content creators with bitcoin and has been testing integrations with non-fungible tokens (NFTs), a type of digital asset that allows people to collect unique digital art.

While Dorsey and Zuckerberg may seem to have a lot in common as creators of two of the world’s leading social media platforms, they haven’t always seen eye to eye, and Dorsey was critical of Facebook’s rebrand.

Soon after Zuckerberg announced his Metaverse vision, a Twitter user noted that the concept was first coined by science-fiction write Neal Stephenson as a virtual world owned by corporations where end users were treated as citizens in a dystopian corporate dictatorship. When the user asked: “What if Neal was right?” Dorsey responded: “He was.”

Ouch.


France says UAE arms deal secures supply chain, jobs

France says UAE arms deal secures supply chain, jobs
Updated 03 December 2021

France says UAE arms deal secures supply chain, jobs

France says UAE arms deal secures supply chain, jobs
  • The deal is worth 14 billion euros for 80 Rafale fighters, 2 billion for air-to-air and cruise missiles and 1 billion for 12 Airbus Caracal helicopters

PARIS: A 17-billion-euro ($19.23 billion) French arms deal with the United Arab Emirates will secure the industrial supply chain for France’s Rafale warplane for the next decade and directly support 7,000 domestic jobs, a French defense ministry official said.
The deal, sealed on Friday, includes the largest ever overseas sale of the French warplane. It brings the number of new or second-hand Rafales sold for export to 236 and will trigger an increase in production for the warplane, the official told reporters.
The sale deepens existing security ties between France and the UAE at a time when diplomats say US allies in the Middle East are increasingly questioning the commitment of the United States to the region following its exit from Afghanistan.
The French official said the contract demonstrated the appetite of several nations to “diversify their security.”
The deal is worth 14 billion euros for 80 of Dassault Aviation’s Rafale fighters, 2 billion for air-to-air and cruise missiles supplied by European consortium MBDA and 1 billion for 12 Airbus H225M Caracal helicopters, the official said.
The sale involves the latest F-4 standard of Rafale being developed for the French air force, which aims to increase connectivity and shared target identification between the jets, following the example of the US Lockheed Martin F-35.
Defense sources have said the Rafale would replace a fleet of Dassault Mirage 2000 jets already deployed in the UAE and is unlikely to displace an order for the F-35 as the UAE continues to hedge its security between two major suppliers.
However, the deal is widely seen as a signal of impatience as the US Congress hesitates on approving an F-35 deal amid concerns about the UAE’s relationship with China, including the prevalence of Huawei 5G technology in the country.
The French official said the deal included no provision to buy back Mirage 2000s or carry out industrial offset investments.


Jeddah music center promotes Kingdom’s nascent entertainment sector

Jeddah music center promotes Kingdom’s nascent entertainment sector
Musicians performing at Jeddah's Makan Music Center. (Supplied)
Updated 03 December 2021

Jeddah music center promotes Kingdom’s nascent entertainment sector

Jeddah music center promotes Kingdom’s nascent entertainment sector
  • Music has become not just an integral part of daily life, but a dynamic new economic sector
  • Jeddah-based Makan Music Center has become a focal point of the Kingdom’s burgeoning music scene.

JEDDAH: Saudi Arabia’s music industry has seen rapid growth from a standing start, largely due to the Vision 2030 reform plan, which positions entertainment front and center in the diversification of the Kingdom’s economy away from oil and its derivatives.

The General Entertainment Authority was established in 2016 with a mission to “provide recreational opportunities for all segments of society...to enrich lives and to spread joy.” It is doing just that with spectacular mega-events like Riyadh Season.

And with the relaxation of social norms in the Kingdom, music has become not just an integral part of daily life, but a dynamic new economic sector.

Numerous KSA-based companies are getting in on the act, via a spectrum of platforms: TV, Internet, social media, streaming services such as Lebanon-based Anghami (focused on Middle East-origin music) and live performance.

Saudi promoters such as Benchmark and AK Events have brought major international stars to local audiences. Mariah Carey, the Black Eyed Peas and Enrique Iglesias have all performed in the Kingdom, prior to the COVID-19 epidemic putting a temporary halt on public gatherings.

Jeddah-based Makan Music Center, which offers a full range of musical services, is a focal point of the Kingdom’s burgeoning music scene.

The center’s General Manager Shaher Karkashan, 32, founded the center with his musician colleagues in 2018.

He told Arab News: “Our goal was to create a hub for musicians. And our vision is to enable an individual to go the full circle with us — from learning an instrument to recording original material and then presenting his or her music to a live audience.

“That’s the goal, for both boys and girls — and surprisingly, over 60 percent of our clients are female.”

Such activities are crucial for the incubation of Saudi musical performers in order to supply high quality content to an industry hungry for new talent.

The center was initially launched with just two rooms — a recording studio and a jamming and learning space.

Three years on, it occupies an entire 400-square meter building divided into an eight-room teaching area, a 250-capacity auditorium and a recording studio.

Clients can learn a variety of instruments, including guitar, violin and drums, along with vocals. The typical age of musicians is 15 to 40, although some are aged 50 and above.

The center also provides equipment, talent and management services for indoor and outdoor corporate events, staged in malls and other public spaces, attracting audiences of up to 2,000.

Karkashan said that as the center has grown, it has become a more professional outfit with a robust business model and several income streams: tuition, ticketed concerts, artist management, equipment hire and corporate events.

He said: “We started with five employees — and now we are 20 and growing. We have six departments, including human resources, accounting and sales, and we’re hiring more people.”

While the KSA’s music industry – specifically live performance — was negatively impacted by the COVID-19 pandemic, the future outlook appears positive. With the Kingdom’s health situation returning to normal, forthcoming live events include the appearance of Justin Bieber, A$AP Rocky and Jason Derulo, who are set to headline post-race concerts at this weekend’s inaugural Formula 1 Grand Prix in Jeddah. Industry players are hoping that this progress will not be impeded by the omicron COVID-19 variant.

Health conditions permitting, Karkashan and his associates are also planning a large new year concert as part of the port city’s Jeddah Season festivities.
Such activities were unheard of in the Kingdom even a few years ago, and Karkashan noted that the changes stemmed from the Vision 2030 reforms.

“Saudi Arabia had some major artists back in the 1980s, after which there was a huge 30-year gap,” he added.

“Then we started seeing a few Saudis performing on TV shows like ‘Star Academy’ and ‘Arab’s Got Talent’ — but they went on to work in Kuwait or the Emirates, because there was no opportunity for them to develop in Saudi Arabia.

“Now things have changed. The Ministry of Culture is involved, there’s the Entertainment Authority, even a Music Authority, and they are all helping to develop the KSA’s music industry.

“I think potentially big names will soon emerge in Saudi Arabia. They are under development now, and we will probably see them go mainstream in around 2023.”

Some of Makan’s clients have come together to form bands — one called Robin and another Bad Reception — and the center has also allowed more established acts, such as death metal outfit Wasted Land, to record and perform their own material.

Karkashan said that he is optimistic about the future of Makan as well as Saudi Arabia’s music sector as a whole.

He pointed out that he was focused on three main areas of growth: artist management, staging bigger outdoor events and opening new centers in Riyadh and other cities in the Kingdom.

“Five years ago, it was all very different. But now aspiring musicians have our full support as well as support from the media and the government.

“And social media really opens up huge possibilities. Many young people are passionate about learning music or starting a band or a career in music, and this is definitely the right time to do it.”

The Saudi music industry is slated to see exponential growth over the next decade and the Makan Music Center will surely play a part in that, both artistically and commercially.