SEC may float some units after restructuring: official

Saudi Electricity Co. (SEC) may float some of its divisions in an initial public offering (IPO) after the utilities provider completes a restructuring program, Middle East Economic Digest (MEED) reported, citing Abdullah Al-Shehri, governor of Saudi Arabia’s Electricity & Cogeneration Regulatory Authority (ECRA).

“I think SEC could have an IPO for the generation companies, once they have been created,” Al-Shehri told the news agency. “It could be part of an IPO, or it could also turn it into a strategic partnership for investors from Saudi Arabia or from outside.”

Al-Shehri said the recent hike in energy and utility prices in Saudi Arabia makes the company more attractive to private buyers.

In 2012, ECRA and SEC launched a strategic plan to restructure the kingdom’s electricity sector. Under the plan, SEC’s assets would be divided into six newly created firms, which include four generation entities, an independent system operator, and separate transmission and distribution companies.

“The plan will break down SEC's generation plants into four companies to encourage competition in this sphere and establish a principal buyer, which will be buying from everybody and selling to the distribution companies,” Al-Shehri said.

SEC is 74 percent owned by the Saudi government directly, with an additional 6.9 percent stake held by Saudi Aramco, the kingdom’s state-owned oil company. The remaining 18.8 percent is held by institutional and retail investors.