Kingdom Holding plans flotation on Dubai and London stock markets

Saudi investment group Kingdom Holding Company (KHC) is to float its hotels division on both the Dubai International Financial Market and the London Stock Exchange.

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By  Tamara Walid Published  February 5, 2006

Saudi investment group Kingdom Holding Company (KHC) is to float its hotels division on both the Dubai International Financial Market and the London Stock Exchange. The company, which is owned by Saudi billionaire Prince Alwaleed bin Talal — the world’s fourth richest man — has yet to finalise details but it is expected the flotation will be worth several billion dollars. Kingdom Holding Investments (KHI), a division of KHC, has interests in 26 properties in 13 countries. This includes 15 operating hotels and resorts, as well as 11 hotels and resorts currently under construction or in the initial stages of development. Prince Alwaleed, chairman of the board of directors of KHC, said: “I am delighted that we are now able to offer new investors the opportunity to participate in the growth potential of KHI. The company and its management have built up a track record of establishing first class and luxury hotels in key growth markets.” Analysts have been quick to point to the group’s impressive results. For the nine month period ending September 30, 2005, KHI’s revenue increased by 45% period-on-period, to US$43.7 million. Net income increased by 47% period-on-period to US$8.2 million. For the 2004 financial year — the last full financial year for which detailed results are available — revenues and net income were US$38.4 million and US$4.4 million respectively. Sarmad Zok, CEO of KHI, claimed that the company was not concerned that political instability might lead to a reduction in tourism — and as such affect its plans for expansion. “I believe that the political events that happen in the region aren’t new with regard to terrorism,” he said. “It’s a global phenomenon, not constrained to the Middle East. What we have noted is that the tourism industry is becoming increasingly resilient to such events and the period of recovery has become much shorter.” He added: “We do not depend on Western tourists to fill our hotels. There’s great diversification in the tourism sector in the Middle East and, surprisingly, after 9/11 the sector has seen very high growth. Where sanctions are concerned, these have been applied to certain countries and have not affected the growth of the sector in the rest of the region.” News of the flotation comes days after Prince Alwaleed confirmed that Kingdom Hotels was to buy the Fairmont Hotels & Resorts group for US$3.9 billion. Fairmont had rejected a hostile takeover bid by other investors last year. However, the international hotel chain recommended Kingdom Holdings' bid to its shareholders. “Kingdom has long recognised the company’s existing value and potential,” said Prince Alwaleed.

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