Citigroup Inks First Deal in Saudi Arabia After Return to Kingdom

Citigroup Inc. has won its first local mandate in Saudi Arabia as the United States lender returns to the kingdom after being gone for 13 years.

The bank is advising budget carrier FlyNas LLC on its initial public offering with Morgan Stanley and NCB Capital, people familiar with the matter said. The airline, partly owned by Prince Alwaleed Bin Talal’s Kingdom holding company plans to sell shares by the end of the year or early 2019, some people said, asking not to be identified because the information given is private.

Citigroup is rebuilding its operations in Saudi Arabia after exiting in 2004. The lender lost its license in the country when it sold its stake in samba financial group. While the bank has played an important role on the kingdom’s very good record breaking $17.5 billion bond sale in 2016 and $9 billion Islamic bond offering last year, it faced limitations working on deals that were signed in Saudi Arabia or takeovers in which the target company was based there.

With the investments banking license Citigroup received in April, the New York based bank can pitch for local advisory work form other places, including IPOs and takeovers in which the target company in the kingdom.

The bank has plans to build a team of 15 to 20 employees on the ground, Carmen Haddad, chief executive officer of Citigroup’s Saudi Arabian business, said in December. It hired Majed Al Hassoun as head of investment banking and former Society General SA Fathi Al-Tarouti to head markets, people familiar with the matter said in November. Citigroup said it held its inauguration board meeting for its Saudi unit in January.

Saudi Arabia is becoming more attractive and attentive to foreign lenders as it overhauls its economy, looks to sell off state assets and other important things and attract more foreign investors. A key part of those plans is the IPO of Saudi Arabian oil company or Aramco, in what could be the largest share sale. The nation’s stock exchange, the biggest in the Middle East, may also be upgraded to emerging market status by two major index providers this year.

FlyNas which started operations as Nas Air in 2007, has been weighing a share sale since 3008 and would be the first airline to be listed on the stock exchange. FlyNas, Citigroup and Morgan Stanley declined to comment, while NCB capital didn’t immediately respond to requests for the comment.


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