RIYADH, 19 November 2007 — Kingdom Holding Company (KHC), chaired by Prince Alwaleed bin Talal, acquired a 9 percent stake in the National Air Services Company Limited (NAS) — a private Saudi airline — through Abraaj NAS Commercial Investment Company for SR262 million ($70 million).
“We are proud of this acquisition and regard it as a significant investment in the aviation industry,” Alwaleed said in a statement yesterday.
Amid aviation industry growth as a result of deregulation, the acquisition was an attractive deal for KHC.
Ahmed Halawani, executive director of private equity at KHC, said: “This is our corner stone in the aviation sector.”
NAS licenses and certifications as well as its complementary product offering and breadth of services are unmatched. NAS offers charter services, aircraft services (AMS), operational support and project management (OSPM), a VIP class scheduled airline service (Al-Khayala) and low cost carrier (LCC) launched in 2007.
This month, NAS announced the addition of 120 new aircraft over the next five years with an investment of over $4 billion to reach 167 aircraft by 2012.
NAS has also extensive local market infrastructure investments, technical know-how and track record, and a strong relationship with its strategic partners and suppliers provide significant competitive advantages.
With its structure, NAS is also well positioned to capitalize on the regional growth currently being witnessed in the aviation sector. The Middle East has the highest per capita spend on private aviation in the world and is the fastest growing business aviation market.
There are approximately 300 private aircraft operating in the region, a third of which are based in Saudi Arabia. With more than one-third of the region’s fleet being more than 20 years old, the resulting replacement cycle in the near future will present an attractive opportunity for regional players. There is limited competition in private aviation and NAS mix of services has enabled it to establish a strong competitive position in the Saudi Arabian market.
Last week, NAS was repoted to be planning planning a stock market flotation next year to raise $600 million.
Speaking at the Dubai Air Show, Taher Agueel, the company’s president, said he was “eyeing around 30 percent” of the company, adding that the value of the group was “in the neighborhood of a couple of billion dollars.”
Riyadh-based NAS signed a deal to buy 20 Airbus A320 family aircraft with an option on a further 18 for its budget airline arm, nasair. The deal followed an earlier agreement signed at the Paris Air Show in June.
“The agreement with Airbus is strategic for NAS services to grow. Our new Airbus A320 family fleet will equip us to fulfill passenger demand using the most reliable, efficient and comfortable aircraft on the market,” Agueel said in a statement.
