Kingdom Holding, the Saudi investment firm led by Prince Alwaleed bin Talal al-Saud, is seeking to raise up to SR5bn ($1.3bn) via a syndicated loan from local banks to fund investments.
Sources close to the plans tell MEED that Kingdom is in the early stages of arranging the debt, but the total loan is likely to be SR3-5bn, depending on market conditions.

Sources say the financing deal is expected to be pushed through quickly as the company is seeking to secure the funding before the banking market slows during the traditional lull in activity in the summer and Ramadan.

Local bank Samba, which already has a close relationship with Kingdom, is understood to be among the institutions that are seeking to underwrite the facility.

Riyad Bank and Banque Saudi Fransi are also working on the deal. The funds are expected to be used for new investments by Kingdom. The debt will be denominated in Saudi riyals and observers expect Kingdom to invest it in the domestic market.

Kingdom holds stakes in a wide range of international businesses, such as News Corporation,
Citigroup, Fairmont Hotels and Ebay. Its local investments include food and retail firm Savola Group, Al-Azizia Commercial Investment Company and industrial group Tasnee.

A source close to the financing deal says banks could be required to underwrite the facility before the summer break. The syndication of the debt would follow later in the year, most likely in October, after Ramadan.

“We are entering a very difficult period,” says one Saudi banker close to the deal. “What could happen on a number of deals in the market, including this one, is that they get underwritten now and put on the shelf for the summer, then syndicated later in the year.”

Samba was financial adviser, lead arranger and underwriter on Kingdom’s initial public offering (IPO) on the Tadawul in July 2007, which raised $860m.

Riyad Bank and Banque Saudi Fransi also worked on the IPO, along with Sabb, Arab National Bank and Saudi Investment Bank. Kingdom holds a 5 per cent shareholding in Samba.

Other investments by Kingdom in Saudi Arabia include ownership of land in Riyadh and Jeddah, where it is planning to a series of developments centred around tall towers.

It has previously developed the tallest tower in the country, the Kingdom Centre in Riyadh, which was completed in 2002.

A tower project on the land in Jeddah, first mooted to be a mile high, is among the proposed developments, although the final height of the building may
be only about 1,150 metres (MEED 16:5:08).

Kingdom says the Jeddah project alone involved an investment of SR55bn, while another planned development in Riyadh would involve investment of up
to SR20bn.