JEDDAH: Saudi Oger Ltd. is in talks to sell half of its stake in the company that operates Saudi Arabia’s Madinah airport to Turkish partner TAV.
The two companies have started talks on the transfer of a 16.7 percent stake in Tibah Airports Development, TAV said in a statement, cited by Bloomberg.
The deal would allow TAV, which also operates Turkey’s biggest airport in Istanbul, to raise its holding to 50 percent from 33.3 percent.
Saudi Oger holds 33.3 percent of Tibah with Al-Rajhi Holding Group and it wasn’t immediately clear if it will sell or retain its other 16.7 percent, Bloomberg reported.
The airport generated 140 million euros ($157 million) of sales and 41.1 million euros of Ebitda in 2015 and is valued at about 338 million euros, Efe Can Kalkandelen, an analyst at Istanbul-based Is Investment, said in a report.
The three companies have been operating Madinah airport, which served 5.8 million passengers last year, since 2012 under a 25-year concession contract that will expire in 2037.
Deputy Crown Prince Mohammed bin Salman told Bloomberg earlier this year that Oger’s problems were unrelated to the Saudi economy and were a result of the company’s debts.
“We have paid them many installments, but they have debt in and out of Saudi. So as soon as money is transferred to their bank accounts, the bank withdraws it. Saudi Oger can’t cover their own labor costs. That’s not our problem, that’s Saudi Oger’s,” Prince Mohammad said in an interview with Bloomberg on April 4.
“If the bank withdraws our installments and Saudi Oger can’t pay a thing to its own contractors and workers, that’s their own problem.”