Saudi developer KEC secures $208.3m loan for Hub project in Madinah

Saudi developer KEC secures $208.3m loan for Hub project in Madinah
The agreement was first announced in April to provide initial funds for the Hub project. (SPA)
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Updated 02 January 2022

Saudi developer KEC secures $208.3m loan for Hub project in Madinah

Saudi developer KEC secures $208.3m loan for Hub project in Madinah
  • The company said the facility will be used for the first phase of the project

RIYADH: Saudi Arabia’s Knowledge Economic City secured funds from Saudi lenders for its Knowledge City Hub in Madinah. 

The developer, also known as KEC, has completed all the requirements for its financing agreement, which amounts to SR782 million ($208.3 million), with the Tourism Development Fund and Riyad Bank, it said in a bourse filing. 

The agreement was first announced in April to provide initial funds for the Hub project.

The company said the facility will be used for the first phase of the project, which includes a mall, a hotel, and a boulevard. It will cover 79 percent of the total cost of the project. 

The mixed-use development will be built on an area of 68,000 square meters, with a total value of SR 1.3 billion, which will include a five-star hotel and other lifestyle spots.


Heathrow owner Ferrovial studies options for stake in Britain’s biggest airport: Sources

Heathrow owner Ferrovial studies options for stake in Britain’s biggest airport: Sources
Updated 09 August 2022

Heathrow owner Ferrovial studies options for stake in Britain’s biggest airport: Sources

Heathrow owner Ferrovial studies options for stake in Britain’s biggest airport: Sources

LONDON: Spain’s Ferrovial is looking at options for its 25 percent stake in London’s Heathrow, two sources told Reuters, and has held preliminary talks with external advisers on the future of its holding in Britain’s biggest airport.

The early stage discussions come amid interest in Ferrovial’s stake from private equity firm Ardian, which has held talks with its own advisers on a possible joint proposal with Saudi Arabia’s Public Investment Fund, these sources and another person familiar with the matter said.

Ferrovial has yet to take a final decision and the discussions may not result in a sale, all the sources said.

HIGHLIGHTS

Heathrow is worth about €24.3 billion ($25 billion), including debt.

Qatar Investment Authority, which has a 20 percent stake in Heathrow, is the second biggest investor in the busy British airport.

Shares in the Madrid-listed firm rose as much as 4.2 percent on the Reuters report. At market close they were up 3.7 percent, scoring their second best day in five months and making them the third best performing stock across the pan-European STOXX 600 index.

Ferrovial and Ardian both declined to comment while PIF did not immediately respond to a request for comment.

Heathrow is worth about €24.3 billion ($25 billion), including debt, JPMorgan analysts calculated in May. By JPMorgan’s estimates, Ferrovial's Heathrow holding has an equity value of €611 million.

But Insight Investment Research analyst Robert Crimes had a less conservative approach and told Reuters the equity value of Ferrovial’s 25 percent stake in Heathrow could be close to €2 billion, well above analysts’ consensus. He said Ferrovial’s stock has yet to reflect the post-pandemic recovery in traffic volumes and inflation-linked returns.

Heathrow, which Aviation data firm OAG said was the world’s fifth busiest airport in July, was hard hit by coronavirus lockdowns, but raised its 2022 traffic forecast to 54.4 million passengers in June after a travel rebound.

Last month Heathrow, like some other airports in Europe, asked airlines to stop selling tickets for summer departures and capped passenger numbers to limit queues, baggage delays and cancellations as it struggled with pent-up demand.

Madrid-based Ferrovial, which controls Spanish transport infrastructure developer Cintra and has stakes in motorways in the US and Canada, has been invested in Heathrow airport for 16 years and ranks as its single largest investor.

Qatar Investment Authority, which has a 20 percent stake in Heathrow, is the second biggest investor in the busy British airport, while Caisse de dépôt et placement du Québec, Singapore’s wealth fund GIC and China Investment Corp. also have sizeable holdings.

QIA declined to comment while CDPQ, GIC and China Investment Corp. were not immediately available.

 


Oil up as Russian pipeline halt revives supply fears

Oil up as Russian pipeline halt revives supply fears
Updated 09 August 2022

Oil up as Russian pipeline halt revives supply fears

Oil up as Russian pipeline halt revives supply fears

NEW YORK: Oil edged up on Tuesday, reversing an early decline as worries about tightening supply were revived after Russia said oil exports to Europe on the southern leg of the Druzhba pipeline had been suspended since early August.
Russian pipeline monopoly Transneft said Ukraine had suspended oil flows via the pipeline leg because Western sanctions had prevented a payment from Moscow for transit fees from going through.
“Not that we need it at this point, but it’s another reminder of how tight the market is and how sensitive the price is to supply disruptions, particularly those from Russia,” said Craig Erlam of brokerage OANDA.
Brent crude was up $1.01, or 1.1 percent, to $97.66 a barrel at 11:30 a.m. EDT (1503 GMT), a sharp rebound from the session low of $94.90. US West Texas Intermediate crude gained 75 cents, or 0.8 percent, to $91.51 a barrel, bouncing from the session low of $89.05.
Oil also got a boost from a weaker US dollar. The dollar index, which measures the currency’s value against a basket of peers, was 0.23 percent lower at 106.09 at 10:25 a.m. ET (1425 GMT). Traders awaited a US inflation report on Wednesday.
Until the Druzhba news, mounting fears that a recession could cut oil demand had offset support for crude prices from tight supply and progress in talks to revive the Iran nuclear accord.
“Early selling had been prompted by a renewed prospect of Iranian nuclear discussions that could eventually facilitate resumption of oil exports out of Iran,” said Jim Ritterbusch, president of Ritterbusch and Associates LLC in a note, but added that he considered an imminent deal unlikely.


GAC approves Zamil Development Co.’s acquisition of Itqan Capital

GAC approves Zamil Development Co.’s acquisition of Itqan Capital
Updated 09 August 2022

GAC approves Zamil Development Co.’s acquisition of Itqan Capital

GAC approves Zamil Development Co.’s acquisition of Itqan Capital

RIYADH: Saudi Arabia’s General Authority for Competition on Tuesday announced its approval for Zamil Development Co.’s acquisition of Itqan Capital.

Itqan Capital is a Saudi closed joint-stock company. 


South Korean group join hands with Aramco for Mideast expansion

South Korean group join hands with Aramco for Mideast expansion
Updated 09 August 2022

South Korean group join hands with Aramco for Mideast expansion

South Korean group join hands with Aramco for Mideast expansion

RIYADH: South Korea’s steel firm SeAH Group has partnered with Saudi Aramco to boost its expansion plans in the Middle East, according to the Korea Economic Daily. 

The group’s special steel maker, SeAH Besteel Corp. has established the joint venture SeAH Gulf Special Steel Industries with the Saudi oil giant.

The JV is set to start building the factory, with an annual capacity of 17,000 tons, in the fourth quarter of 2022. Commercial operations are likely to begin in the first half of 2025.

“We will actively explore the Middle East market with various products such as stainless steel precision tubes and seamless stainless steel pipes,” said a SeAH Changwon official.


Biden signs bill to boost US chips, compete with China

Biden signs bill to boost US chips, compete with China
Updated 09 August 2022

Biden signs bill to boost US chips, compete with China

Biden signs bill to boost US chips, compete with China

WASHINGTON: President Joe Biden on Tuesday signed a landmark bill to provide $52.7 billion in subsidies for US semiconductor production and research and to boost efforts to make the US more competitive with China’s science and technology efforts.

“The future is going to be made in America,” Biden said, calling the measure “a once-in-a-generation investment in America itself.”

Biden touted investments that chip companies are making even though it remains unclear when the US Commerce Department will write rules for reviewing grant awards and how long it will take to underwrite projects.

Some Republicans joined Biden on the White House lawn to attend the signing of the chips bill that was years in the making in Congress.

The chief executives of Micron, Intel, Lockheed Martin, HP and Advanced Micro Devices attended the signing as did governors of Pennsylvania and Illinois, the mayors of Detroit, Cleveland and Salt Lake City, and lawmakers.

The White House said the bill’s passage was spurring new chip investments. It noted that Qualcomm on Monday agreed to buy an additional $4.2 billion in semiconductor chips from GlobalFoundries’ New York factory, bringing its total commitment to $7.4 billion in purchases through 2028.

The White House also touted Micron announcing a $40 billion investment in memory chip manufacturing, which would boost US market share from 2 percent to 10 percent, an investment it said was planned with “anticipated grants” from the chips bill.

Progressives argued the bill is a giveaway to profitable chips companies that previously closed US plants, but Biden argued on Tuesday “this law is not handing out blank checks to companies.”

HIGHLIGHTS

The White House noted that Qualcomm on Monday agreed to buy an additional $4.2 billion in semiconductor chips from GlobalFoundries’ New York factory, bringing its total commitment to $7.4 billion in purchases through 2028.

The White House also touted Micron announcing a $40 billion investment in memory chip manufacturing.

The legislation aims to alleviate a persistent shortage that has affected everything from cars, weapons, washing machines and video games. Thousands of cars and trucks remain parked in southeast Michigan awaiting chips as the shortage continues to impact automakers.

A rare major foray into US industrial policy, the bill also includes a 25 percent investment tax credit for chip plants, estimated to be worth $24 billion.

The legislation authorizes $200 billion over 10 years to boost US scientific research to better compete with China. Congress would still need to pass separate appropriations legislation to fund those investments.

China had lobbied against the semiconductor bill. The Chinese Embassy in Washington said China “firmly opposed” it, calling it reminiscent of a “Cold War mentality.”

Many US lawmakers had said they normally would not support hefty subsidies for private businesses but noted that China and the EU had been awarding billions in incentives to their chip companies. They also cited national security risks and huge global supply chain problems that have hampered global manufacturing.