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SVC invests $30m in IMPACT46 Fund III to support pre-IPO companies

SVC invests $30m in IMPACT46 Fund III to support pre-IPO companies
SVC CEO Dr. Nabeel Koshak and IMPACT 46 Founder Abdulaziz Alomran signing the agreement. Supplied
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Updated 04 October 2023
Arab News
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SVC invests $30m in IMPACT46 Fund III to support pre-IPO companies

SVC invests $30m in IMPACT46 Fund III to support pre-IPO companies
Updated 04 October 2023
Arab News
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RIYADH: As part of its commitment to minimize financing gaps for startups, Saudi Venture Capital Co. has invested SR112.5 million ($29.9 million) in IMPACT46 Fund III. 

According to a press release, the move is designed to empower late-stage companies in the region by investing in growth and pre-initial public offering phases.

A late-stage company is a business that has been in operation for a few years and has demonstrated viability. 

The release added that the trust will aim to allocate a specific amount for early-stage startups, focusing primarily on seed rounds in the broader Middle East. 

“The investment in IMPACT46’s Fund III falls under the company’s fund investment program, which aims to enhance the growth of the venture capital ecosystem for startups in the Kingdom across all stages and sectors,” said SVC CEO Nabeel Koshak in a statement. 

“This is in line with the growth witnessed by the venture capital sector in the Kingdom over the past years, making it a leader in venture capital in the Middle East and North Africa in the first half of 2023 in terms of invested amounts,” Koshak added. 

The Kingdom clinched the top spot in venture capital value for the first half of 2023, registering investments that surpassed $446 million, the highest in the MENA region. 

“We are delighted that SVC and IMPACT46 are once again joining forces, this time with our Fund III, which aims to support the growth of the tech startup ecosystem in Saudi Arabia. This partnership demonstrates our commitment to achieving our shared vision for driving a sustainable economic impact,” said IMPACT46 CEO and Founder Abdulaziz Al-Omran in the statement.

“This investment not only signifies the growing maturity of the VC activity in Saudi Arabia but also highlights the Kingdom’s potential to emerge as a frontrunner in this sector,” Al-Omran added. 

Founded in 2018, SVC operates under the umbrella of the SME Bank and the National Development Fund.  

SVC has channeled its resources and efforts toward empowering startups with an investment portfolio that boasts $2 billion. 

The company’s reach encompasses 43 investment funds and over 700 startups and small and medium enterprises, firmly positioning itself as a catalyst for entrepreneurial growth. 

Furthermore, IMPACT46 is a Saudi-based venture capital company that invests from seed-stage startups to more mature businesses. 

Topics: Saudi Venture Capital Co. IMPACT46

Ma’aden, Bahrain’s Alba to form global aluminum powerhouse with new deal

Ma’aden, Bahrain’s Alba to form global aluminum powerhouse with new deal
Updated 16 September 2024
Nour El-Shaeri
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Ma’aden, Bahrain’s Alba to form global aluminum powerhouse with new deal

Ma’aden, Bahrain’s Alba to form global aluminum powerhouse with new deal
Updated 16 September 2024
Nour El-Shaeri

RIYADH: Saudi Arabian Mining Co., known as Ma’aden, has signed a non-binding agreement with Aluminium Bahrain B.S.C., or Alba, to potentially create a global aluminum producer.

The agreement, dated Sept. 16, outlines plans to merge Ma’aden’s aluminum operations with Alba’s, forming a force in the global aluminum market.

The deal aims to leverage over 75 years of combined operational and financial expertise to enhance their competitive edge on the global stage, according to a press release.

Under the terms of the agreement, Ma’aden will transfer the entire share capital of Ma’aden Aluminum Co. and Ma’aden Bauxite and Alumina Co. to Alba, including the rights to market and sell products from Ma’aden Aluminum Co.

In exchange, Ma’aden will acquire newly issued shares in Alba. The specifics regarding the number of shares and Ma’aden’s ownership stake in Alba will be determined at a later date, as noted in a bourse filing.

This announcement comes on the heels of a deal made just a day earlier, in which US industrial giant Alcoa Corp. agreed to sell its stakes in Ma’aden Aluminum Co. and Ma’aden Bauxite and Alumina Co. to Ma’aden.

In this transaction, Alcoa will receive $150 million in cash and newly issued shares representing approximately 2.21 percent of Ma’aden’s share capital after the deal is completed.

The agreement with Alba also includes the possibility of a cross-listing on the Saudi Stock Exchange, pending further negotiations. The deal is effective immediately and will remain valid until Dec. 31.

It aligns with Ma’aden’s growth and sustainability strategy, aiming to strengthen its presence in Saudi Arabia and the broader Middle East region.

“Harnessing the combined scale and expertise of both businesses to forge a new global champion will not only advance Ma’aden’s ambitions for aluminum but also significantly boost the economic ties between Bahrain and Saudi Arabia,” Ma’aden CEO Bob Wilt said.

“By bringing together two of the region’s most experienced players in the sector, we are setting the stage for stronger economic growth, enhanced job creation, and increased aluminum production capacity. This partnership will elevate our competitive edge on a global scale,” he added.

Echoing Wilt’s sentiments, Alba Chairman Khalid Al-Rumaihi said this partnership will cement the company’s position as the largest regional aluminum producer.

“Our partnership will not only deepen the strong ties between Bahrain and Saudi Arabia but also contribute to Bahrain’s economic diversification and job creation. This is a compelling proposition and an exciting moment for Alba, Ma’aden, and our respective stakeholders, and we look forward to sharing further updates in due course,” Al-Rumaihi said.

The financial impact of the transaction will be assessed following a comprehensive due diligence process.

Completion of the deal is not guaranteed and depends on the satisfactory conclusion of financial, tax, legal, technical, and commercial evaluations, as well as obtaining necessary regulatory and corporate approvals.

Ma’aden has engaged Merrill Lynch Kingdom of Saudi Arabia as its financial adviser and AS&H Clifford Chance as its legal adviser. Alba has appointed Moelis & Co. UK LLP as its financial adviser.

This development comes as Ma’aden reports strong financial performance, with a net profit of SR2 billion ($532 million) for the first half of the year, marking a 160 percent increase compared to the same period in 2023.

Topics: main

Saudi investment licenses for Egyptian firms double in 2024, says minister 

Saudi investment licenses for Egyptian firms double in 2024, says minister 
Updated 16 September 2024
Reem Walid
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Saudi investment licenses for Egyptian firms double in 2024, says minister 

Saudi investment licenses for Egyptian firms double in 2024, says minister 
Updated 16 September 2024
Reem Walid

RIYADH: Saudi Arabia’s issuance of investment licenses to Egyptian businesses more than doubled in 2024, reflecting a significant boost in economic collaboration between the two nations, according to a senior minister.

At a meeting with Egyptian Prime Minister Mostafa Madbouly, organized by the Federation of Chambers in Riyadh, Saudi Investment Minister Khalid Al-Falih underscored Egypt’s increasing role as a key economic partner for the Kingdom. This follows Saudi Arabia’s exports to Egypt totaling $6.44 billion in 2022, while Egypt’s exports to the Kingdom reached $2.35 billion, as reported by the Observatory of Economic Complexity.

“During 2024, it (investment licenses) grew by more than 100 percent over the previous year, and Egyptian investors created more than 80,000 jobs in the Saudi economy,” the minister said.

He further emphasized the importance of the Egyptian market to the Kingdom, noting its broad involvement in sectors such as tourism, transportation, infrastructure, real estate development, agriculture, energy, and information technology.

“We, in the Kingdom, believe that strengthening cooperation with Egypt will benefit both the Saudi and Egyptian economies, which are, as I mentioned, the nucleus and heart of the Arab economy,” Al-Falih added.

The minister also pointed out that collaboration and integration between the two countries, along with leveraging their competitive advantages, would accelerate regional economic growth. He highlighted the relevance of this cooperation in light of global economic shifts supporting global supply chains, environmental preservation, and emerging sectors like information technology and artificial intelligence.

“The Saudi investor will not only provide Egypt with his investments but will be a partner with international companies that invest with him in the Kingdom and in all countries of the world. We aspire for Egypt to be an extension of investments in the Kingdom, giving us the weight of the large strategic market and the free trade agreements that Egypt enjoys,” he concluded.

During the meeting, Prime Minister Madbouly noted that Saudi Arabia remains the primary destination for Egyptian expatriates. “Our goal is to raise Egyptian exports from $35 billion to $145 billion,” he said.

Madbouly also emphasized Egypt’s efforts to resolve issues faced by Saudi investors, stating that many problems have been addressed, with ongoing work to tackle remaining challenges. He highlighted Egypt’s aim to attract more Saudi investments, especially with new incentives such as the golden license.

Egypt’s Minister of Investment and Foreign Trade, Hassan El-Khatib, who also attended the meeting, stressed the importance of listening to investors. “We know the challenges that the investor faces and find solutions to them,” he stated.

El-Khatib added: “The goal in this field is for me to have a clear investment policy that puts the competitiveness of the Egyptian economy at the heart of this strategy.”

Topics: main

Saudi entertainment authority to provide up to $26.6m in support to SMEs

Saudi entertainment authority to provide up to $26.6m in support to SMEs
Updated 16 September 2024
Nour El-Shaeri 
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Saudi entertainment authority to provide up to $26.6m in support to SMEs

Saudi entertainment authority to provide up to $26.6m in support to SMEs
  • Initiative aims to enhance and empower the entertainment industry in the Kingdom
  • Program offers coverage of up to 90%, depending on the size of the enterprise
Updated 16 September 2024
Nour El-Shaeri 

RIYADH: Saudi Arabia’s General Entertainment Authority has increased its financial support for small and medium enterprises in the sector to up to SR100 million ($26.6 million), according to an official announcement. 

The initiative, in partnership with the Kafalah financing guarantee program for SMEs, aims to enhance and empower the entertainment industry in the Kingdom, as stated in a post by the GEA on the X platform. 

The program offers coverage of up to 90 percent, depending on the size of the enterprise. 

Initially launched in 2022, the initiative provided financing of up to SR15 million for medium enterprises, SR5 million for small companies, and SR2.5 million for micro-businesses through approved banks and financing firms. Specific details about the new SR100 million support have not yet been disclosed. 

This program is part of a broader effort to support and stimulate investments in the entertainment sector, coordinated by the Ministry of Finance, the General Entertainment Authority, and the Quality of Life Program Center. It aligns with the objectives of Saudi Vision 2030, which is to support and develop the entertainment industry in the Kingdom. 

Vision 2030 aims to transform Saudi Arabia’s entertainment sector by increasing household spending on recreation from 2.9 percent to 6 percent by 2030. 

It seeks to generate over SR120 billion in investments, create 100,000 direct and indirect jobs, and enhance the sector’s contribution to the economy.

Since its inception in July 2022, the undertaking has provided approximately SR70 million in financing and guarantees to entertainment establishments across Saudi Arabia. 

By the end of June 2023, a total of 16 establishments had benefited from the program, with the value of guarantees reaching SR31.3 million, supporting micro, small, and medium-sized enterprises. 

The initiative aims to further develop the entertainment sector by contributing to the growth of beneficiary establishments, helping them evolve into a major entity within the industry. 

It also seeks to provide necessary guarantees for financing and increase funding for businesses in entertainment and related services, including the sector’s supply chain and infrastructure. 

Additionally, the initiative aims to enhance the entertainment sector’s ecosystem and promote sustainability. 

Topics: main General Entertainment Authority small and medium enterprises (SMEs) Saudi Arabia Saudi entertainment Vision 2030

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Saudi Arabia to develop map of iron, steel manufacturers as industry leaders meet in Riyadh

Saudi Arabia to develop map of iron, steel manufacturers as industry leaders meet in Riyadh
Updated 16 September 2024
MOHAMMED AL-KINANI
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Saudi Arabia to develop map of iron, steel manufacturers as industry leaders meet in Riyadh

Saudi Arabia to develop map of iron, steel manufacturers as industry leaders meet in Riyadh
  • Kingdom ranked fourth globally in terms of largest producers of reduced iron and 20th in terms of production capacity, said head of Federation of Saudi Chambers
  • Saudi Arabia has 41 factories with a production capacity of 14 million tonnes, employing 15,000 workers
Updated 16 September 2024
MOHAMMED AL-KINANI

JEDDAH: Saudi Arabia aims to create a comprehensive map of iron and steel manufacturers across the Kingdom and the Arab world, as top leaders have gathered in Riyadh to discuss the latest sector developments.

Speaking during the first Saudi International Iron and Steel Conference, Walid bin Hamad Al-Arenan, secretary-general of the Federation of Saudi Chambers, said that the Kingdom’s steel industry is one of the most crucial economic sectors.

The country’s efforts to advance its mineral and mining industry are part of Saudi Arabia’s broader strategy to diversify an economy that has long been dependent on oil. 

The event is especially significant in light of ongoing domestic and global developments shaping the vital sector, a cornerstone of economic growth.

Under the patronage of the Minister of Industry and Mineral Resources, Bandar Alkhorayef, the three-day event began on Sept.16 at the King Faisal International Conference Hall, according to the Saudi Press Agency.

Organized by the Federation of Saudi Chambers through the National Committee for Steel Industry, the event featured a range of local and international industry leaders and experts.

Al-Arenan said that an important objective of the private sector is to increase the gross domestic product from 40 percent to 65 percent, adding: “This is a significant target, reflecting both the role of the private sector and the support provided by the government.”

Presenting data on the industry within the Kingdom, Al-Arenan said: “We have 780 million tonnes of reserves, and we are ranked fourth in the world in terms of the largest producers of reduced iron and 20th in terms of production capacity.” 

He added that the country has 41 factories with a production capacity of 14 million tonnes, employing 15,000 workers.

He further said the steel and iron event will be held quarterly to support the sector.

Bandar Al-Sulaim, chairman of NCSI, said that the forum aims to discuss local and global updates in the steel sector.

He added that the committee represents 70 percent of steel producers in the Kingdom and is working on creating and disseminating a map of steel manufacturers in Saudi Arabia and the greater region, in addition to being a member of global and Arab steel associations. 

Participants voiced concerns over the decline in manufacturing in regions like the EU, where raw steel production dropped to a record low of 126 million tons in 2023. In contrast, India, the second-largest steel producer, and the US have reported positive growth rates.

The Kingdom is ranked 12th worldwide in terms of production capacity for steel billets and slabs. The market size for long and flat steel products is 18 million tons.

Saudi Arabia’s iron and steel industry generated a production value of $5.4 billion in 2023, representing 7.2 percent of the total production in the Middle East and North Africa region, highlighting the nation’s significant role in regional industry and its growing influence in the sector.

This is based on a May 2023 report by London-based market research company Euromonitor International on Saudi Arabia’s basic iron and steel industry, following the International Standard Industrial Classification of All Economic Activities.

The industry’s export share rose to 27 percent of total production output, indicating an increasing focus on international markets. The growth in exports is contributing to the sector’s improved profitability, which stood at 22.9 percent, making it the ninth highest in the region. This indicates that the industry is performing efficiently compared to its regional counterparts.

In terms of market structure, the number of companies decreased to 300, reflecting a trend toward industry concentration. The top five firms alone accounted for 57.1 percent of total production value, demonstrating the dominance of a few large players in the market, according to the analytical report. 

Among them, Saudi Iron and Steel Co. emerged as the largest player, contributing 33 percent of the industry’s total production value.

The Kingdom’s market size for basic iron and steel reached $11.6 billion in 2023, making it the fifth largest in the region. Investments played a crucial role, accounting for 54.4 percent of total demand, driven by infrastructure and industrial projects, which are key growth drivers for the industry.

Topics: Saudi Arabia manufacturing Saudi steel industry main

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Closing Bell: Saudi markets end in red across all indices

Closing Bell: Saudi markets end in red across all indices
Updated 16 September 2024
Nour El-Shaeri
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Closing Bell: Saudi markets end in red across all indices

Closing Bell: Saudi markets end in red across all indices
  • Parallel market, Nomu fell by 36.02 points, or 0.14%, to end the day at 25,733.93
  • MSCI Tadawul 30 Index decreased by 1.94 points, or 0.13%, closing at 1,476.66
Updated 16 September 2024
Nour El-Shaeri

RIYADH: Saudi Arabia’s Tadawul All Share Index closed at 11,867.37 points, down by 32.93 points or 0.28 percent on Monday.

The parallel market Nomu also saw a decline, falling by 36.02 points, or 0.14 percent, to end the day at 25,733.93. The MSCI Tadawul 30 Index decreased by 1.94 points, or 0.13 percent, closing at 1,476.66.

The main index, TASI, recorded a trading volume of SR5.4 billion ($1.44 billion), with 65 stocks advancing and 160 declining. Nomu, in contrast, reported a trading volume of SR32.7 million.

Year-to-date, TASI has dropped 100.02 points or 0.84 percent, while Nomu has gained 1,204.95 points or 4.91 percent. This time last year, TASI was around 11,104 points, and Nomu stood at 22,791.81 points.

Among the top performers on TASI, Al-Baha Investment and Development Co. saw its share price rise by 5.88 percent to SR0.18. Riyadh Cement Co. followed with a 4.48 percent increase, closing at SR26.80.

Rasan Information Technology Co. also made gains, climbing 4.32 percent to SR60.4. Saudi Paper Manufacturing Co. and SEDCO Capital REIT Fund increased by 4 percent and 3.74 percent, respectively, closing at SR67.60 and SR8.05.

Conversely, Saudi Fisheries Co. experienced the largest decline, falling 5.33 percent to SR24. Saudi Arabian Cooperative Insurance Co. and Mediterranean and Gulf Insurance and Reinsurance Co. also faced losses, with shares decreasing to SR17.80 and SR24.80, reflecting declines of 4.61 percent and 4.06 percent, respectively. Al-Babtain Power and Telecommunication Co. and Saudi Reinsurance Co. also reported losses.

On Nomu, Al-Modawat Specialized Medical Co. was the top performer, with its share price surging 11.15 percent to SR14.56. Meyar Co. and Meyar Co. also saw significant gains, closing at SR68 and SR34.80, representing increases of 8.11 percent and 7.41 percent, respectively. Banan Real Estate Co. and Saudi Lime Industries Co. also performed well.

On the downside, Saudi Azm for Communication and Information Technology Co. was the worst performer in Nomu, declining by 4.62 percent to SR21.90. Other underperformers included Qomel Co. for Education and Mohammed Hadi Al Rasheed and Partners Co., with share prices falling by 4.3 percent and 4.28 percent to SR129.20 and SR76, respectively.

Naas Petrol Factory Co. and Al Rashid Industrial Co. also experienced declines, ending the day at SR67.20 and SR34, respectively.

Topics: Finance Saudi Arabia Closing Bell Saudi Stock Exchange (Tadawul) Tadawul All Share Index (TASI) MSCI Tadawul Index TASI Nomu TASI Tadawul

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