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|17 January, 2019

Saudi SWCC seeks proposals for advisory role on sale of assets-sources

Saline Water Conversion Corp could sell stakes in four to six assets in the process

Investors and speculators monitor stock prices on a screen at the FALCOM investment bank in Riyadh August 5, 2014.

Investors and speculators monitor stock prices on a screen at the FALCOM investment bank in Riyadh August 5, 2014.

REUTERS/Faisal Al Nasser

RIYADH/DUBAI- Saline Water Conversion Corp (SWCC), which operates desalinisation plants and power stations in Saudi Arabia, has asked banks for proposals for an advisory role on the sale of stakes in assets such as desalination plants, two people familiar with the matter said.

The request was sent out to Saudi and international investment banks, they said. One of the sources said SWCC could sell stakes in four to six assets in the process.

"This would be the first sale of these assets, they will do it in phases," the source said.

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SWCC officials were not immediately available to comment.

SWCC, which operates some 30 desalination plants, currently produces about 20 percent of the world's desalinated water and is the second-largest power provider in the kingdom.

After the stake sale, which could be worth a couple of billion dollars, the plan is to list these assets on the stock market as part of a long-term plan, the sources, who asked to remain anonymous, said.

The government has made privatising the water sector one of its priorities as it embarks on a drive to raise money from state assets to reduce pressure on capital spending and transform the economy away from a reliance on oil revenue.

"This could be a significant minority stake but the successful buyer would be able to operate the assets," one of the sources said.

The SWCC asset sale is part of Saudi Arabia's plan to generate 35 billion to 40 billion riyals ($9 billion to $11 billion) in non-oil revenues from its privatisation program by 2020 and create up to 12,000 jobs, according to a government document published by the official Saudi Press Agency last year.

The initiative targets 14 public-private partnership (PPP) investments worth 24 billion to 28 billion riyals. It includes the corporatisation of Saudi ports and the privatisation of the production sector at the SWCC and the Ras Al Khair desalination and power plant, the document showed.

The kingdom's privatisation programme has seen delays in the past including plans to float oil giant Aramco, which was initially slated for 2018, but officials have now said is expected to happen by early 2021.

(Reporting by Hadeel Al Sayegh and Saeed Azhar, Editing by Emelia Sithole-Matarise) ((Saeed.Azhar@thomsonreuters.com; +971 44536787; Reuters Messaging: saeed.azhar.reuters.com@reuters.net))

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