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Prince Al-Waleed reviewing portfolio after losing $8.26Bn in Citigroup |
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News Watch
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Friday, 23 January 2009 |
Saudi Arabia’s Prince Alwaleed bin Talal, whose Kingdom Holding Co reported a record loss in the fourth quarter, has said that he is reviewing his portfolio .
In response to a question about selling his shares in local companies such as Samba Financial Group, a bank, and Savola Group, a conglomerate, the prince told local journalists on Tuesday, that the financial crisis has prompted a “rebalancing” and “redirecting” of his company. He gave no further details.
A series of large Saudi companies, including Sabic, the state-controlled petrochemical giant, have recently reported sharp declines in profit or losses, demonstrating that the oil-rich nation is not insulated from the global financial turmoil. But the prince’s Kingdom Holding losses have surpassed the others.
On Tuesday the company, in which Prince Alwaleed has a 94 per cent stake, posted a loss of SAR31bn ($8.26bn) in the fourth quarter because of the drop in the value of its global investments, including a 3.4 per cent stake in Citigroup.
“The US government has given great support (to Citi) and we hope these measures will soon stabilise the bank,” the prince said on Tuesday. He said that Kingdom’s losses include a SAR15bn provision on its investment portfolio to compensate for a possible decline in assets, and the actual loss represent only 20 percent of the company’s capital.
Kingdom Holding’s stake in Citigroup represented more than 40 per cent of the total value of the company in 2007 when it floated on the Saudi stock exchange.
By the end of 2008 the value of the assets dropped to SAR50bn from around SAR90bn in July 2007, according to Reuters.
In November last year, the prince said that he pumped $350m into the ailing Citigroup, along with other investors including the Kuwait Investment Authority, who injected a total of $5bn into the bank.
The billionaire prince said that, despite the financial crisis and the losses, there would be no delay in Alakarian real estate projects in Jeddah and Riyadh. The current drop in the prices of building materials provides good opportunity, he said, when local and international economies rebound.
“The company can take the losses and start afresh,“ Prince Alwaleed said. “We will soon announce the start of two giant real estate projects in Jeddah and Riyadh, which reflects the financial strength of the company and the opportunities available in the Saudi economy.”
FT
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