Talal Al-Maiman, CEO of Kingdom Holding Company, confirmed that the company has enough liquidity to make new investments without having to resort to the recent deal through which half of Kingdom Holding’s stake in the Kingdom was sold. Four Seasons Holding Company Cascade Investment Company, owned by billionaire Bill Gates, equivalent to 23.75%, with a total value of 8.29 billion riyals, and a reserve of 23.75%.
He said in an interview with “Al Arabiya”, that the company still has about 4.5 billion riyals of cash, before the deal, which it can use in new investments, and what will come in January 2022 from the sale of the “Four Seasons” share is considered new cash that will be devoted to new uses. Or to deepen existing Kingdom Holding investments.
He explained that the decision is not based on temporary conditions and the passage of certain investments in certain economic cycles, but is always based on economic feasibility and returns.
He continued, “Kingdom Holding is an experienced company in the field of investment and timing is not the basis for decision-making, but rather the return on investment and the added value for investors, in addition to the profits obtained from the return on investment,” describing the deal as “excellent” between two major companies in view of the book value.
The CEO of Kingdom Holding Company considered that the value of the deal is fair and compatible with the expected return of the hospitality sector to pre-Covid-19.
On the role of the proceeds of the “Four Seasons” deal in easing the pressure of allocations, Al-Maiman explained that it will be allocated mainly to new investments, while part of it will go to existing loans, which are mostly revolving loans, but in the event that new investments are not available to open up to global markets, then the cash will be used to reduce loans. and reduce the cost of borrowing.
He pointed out that Kingdom Holding is more cautious in making an investment decision at the present time, due to the high markets, but at the same time and during the 2020 pandemic year, it has developed an investment program, a large part of which has been implemented, and in the coming weeks it is expected to be completed by purchasing shares in some companies.
Abdullah Al-Rabadi, an expert in financial markets, said that the Kingdom Holding Company does not need liquidity, as it has cash of more than 4 billion riyals, indicating that the proceeds from the sale of a stake in Four Seasons hotels will add to it about 8.5 billion riyals.
In his interview with Al Arabiya, he added that these amounts are supposed to be reinvested or distributed to the company’s investors, but the company announced that it will use it to reduce the volume of its loans.
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