JEDDAH, 30 July 2006 -- Dr. Nahed M. Taher, chairwoman of the board of directors of Compass Consulting, announced here yesterday that the Saudi Capital Market Authority (CMA) has granted Compass Consulting a license to offer advising and arranging services.
Nahed said Compass, a limited liability company, will be based in Jeddah, and will begin offering its services next month. Ziyad Omar will be deputy chairman of the company.
She emphasized, "Compass Consulting will provide specialized services in management, financial advisory, feasibility studies, value migration, financial engineering and pre-initial public offering (IPO) or private placement valuations for both infrastructural and industrial organizations. It will also be involved in the structuring of Special Purpose Vehicles (SPVs) for specific projects, or for consortiums to construct or operate government's mega privatization projects."
Nahed stated that the "region would benefit substantially from knowledge-based consulting services, using in-depth analysis supported by financial ratio tools and disciplined implementation processes. All combined, these will expedite the enhancement of our region's business structure and economy at large." She added that the "next phase of our country's development will require the presence of such firms as business sectors to undergo tremendous transformation over the next few years in light of the Kingdom's accession to the World Trade Organization (WTO), liberalization policies and its opening up to the global economy; in addition to the Kingdom's reorientation toward reforming and streamlining its economic structure and allowing greater private sector participation in the economic cycle."
"Furthermore, in light of the expected rigorous and accelerating specialized activities, such as restructuring and mergers and acquisitions, there is increasing demand for local financial consulting firms with global standard of skills and services," she said and added that the "specialist consulting and advisory services will also assist and maximize the value of the substantial number of firms planning to seek listing in the Saudi stock market."
Recently, the Kingdom witnessed further deepening of its financial market with the issuance of Islamic bonds (Sukuk) by Saudi Basic Industries Corp. (SABIC), an event that will enhance financial stability and further stimulate economic development. Moreover, it will further enhance the need for consulting services in such areas as structuring and advice on the issuance of such long-term debt instruments. With such services preceded by the "a priori" work of properly structuring the firm in order to get the corporate rating and consequently its bonds issued according to its core business and expected future performance.
Nahed pointed out "we are at a juncture that requires the presence of local firms with considerable international know-how, competence and specialized expertise in areas of offering consulting services, financial advising and arranging." She said, "Our past dependence on the world's popular consulting firms did not allow for a local consulting knowledge base to develop which would have been able to deal with the changing needs of the region. Besides, the high cost associated with it impeded using their services which came most of the time without effective long-term value addition to our economic performance".
She added, "We will offer specialized services in the areas of restructuring and mergers as well as acquisitions for private sector in special economic activities mainly industrial and infrastructural firms which will ensure over the long-term their sustainable and healthy performance specially with the accelerating globalization and economic openness."
"The objectives behind the launch of Compass Consulting can be summarized into, providing efficient management and the sourcing of various financing arrangements and structuring them in a manner that will lessen the costs and increase their marginal profits of local companies," Nahed said. "In the past, both Saudi and Gulf firms generally relied on expansion through their own capital, available liquidity or through direct bank loans that come with a high cost, which in turn placed an undue heavy burden on the firms' financial accounts and without obvious cooperation between the provider of the funds and the firm based on a clear strategy of growth according to its growth projections," she added.
As such, "Our present financial consulting services require precise specializations and strong local efforts in order to promote our firms to international standards". "The crux of our business at Compass Consulting is to focus on local private sector firms and to offer consulting services for government organizations in the areas of privatization," Nahed said.
"Our vision is to be a Saudi consulting firm with global reach, and we are confident through our efforts and the building of our financial and intellectual capital that we will be able to further contribute to the development of our national economy and to reach our desired position in a record time," Nahed added.
By Khalil Hanware
© Arab News 2006
