Kingdom Holding to use SAR 4.5 bln in cash for new investments: CEO

Kingdom Holding Co. CEO Talal Al Maiman

Kingdom Holding Co.’s cash on hand stood at SAR 4.5 billion before the deal to sell a 23.8% stake in Four Seasons Hotels and Resorts, which may be used for new investments, Al-Arabiya reported, citing Chief Executive Officer (CEO) Talal Al Maiman.

The company’s decision to sell half of its stake in Four Seasons was taken based on the desired returns for investors, he added.

Al Maiman said that the value of the deal is “fair” given the future recovery and return to pre-COVID-19 pandemic levels in the hospitality sector.

The gain from the deal, which will be closed in January 2022, is considered “new cash”. The company will use it either for new investments or deepening investments in some existing companies.

Al Maiman asserted that timing is not the basis for making investment decisions but the return on investment, added value for investors, and profits obtained from the return on investment.

Kingdom Holding does not take immediate decisions when its investments go through certain pressures and economic cycles, focusing on economic feasibility and returns.

Most of the company’s loans are new credit, the CEO highlighted.

Accordingly, in case of a lack of new investments in global markets, the company will use cash to reduce loans and minimize the amounts paid as commissions for existing loans.

Al Maiman said that Kingdom Holding is currently more cautious in making investment decisions due to the recovery in global markets, pointing out that it has set an investment program during the past year but has not been completely finalized.

Kingdom Holding plans to complete the program in the coming weeks by purchasing more shares in some companies, the CEO stated.

According to data compiled by Argaam, Kingdom Holding Co. announced, on Sept. 8, that its affiliate, , Kingdom Investment I (TSF),  signed an agreement with FS Washington Acquisition Corp., a subsidiary of Cascade Investment Group, to sell its 23.75% stake in Four Seasons Hotels and Resorts with immediate cash returns for the subsidiary of SAR 8.3 billion. 

The company expects to achieve immediate profits before taxes of about SAR 5.9 billion.

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