Diriyah Company contemplates Tadawul IPO by early 2027, says CEO

 

Diriyah Company contemplates Tadawul IPO by early 2027, says CEO

Diriyah Company, the developer behind the transformation of the historic Saudi city into a monumental tourism project, is exploring the possibility of launching an initial public offering (IPO) on the Tadawul stock exchange by early 2027. This strategic move aligns with the kingdom's objective to diversify its economy, reduce its reliance on oil sectors, and entice international visitors.

The company has already achieved a revenue of 50 million Saudi riyals ($13.3 million), which it anticipates will at least double in 2024. This remarkable growth follows the substantial assets opened in 2022, attracting over one million visitors to the historical Al Turaif District, as stated by Jerry Inzerillo, the Group Chief Executive of Diriyah Company.

 

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Should Diriyah Company proceed with the IPO, it plans to list 100% of its shares on the Saudi stock exchange. Inzerillo expressed, "We've hired lawyers and bankers... we're putting the preliminary structure in place to evaluate what we have to do over the next short period of time to build up to an IPO that could be listed on the Saudi stock exchange." He shared this during the World Travel and Tourism Council's global summit held in Rwanda, adding, "We hope that within 36 months we’ll have a realistic window."

Diriyah earned recognition as Saudi Arabia's fifth giga-project designated by the sovereign wealth fund in January, following Neom, Red Sea, Qiddiya, and Roshn. With a budget of $63.2 billion, the Diriyah project aims to revolutionize the city into a prominent tourist destination.

 

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Historically, Diriyah served as the kingdom's first seat of power, constructed with mud bricks along the banks of Wadi Hanifa in the northwest of Riyadh. Home to the UNESCO World Heritage Site of At-Turaif, Diriyah holds immense significance as the birthplace of Saudi Arabia and the ancestral home of the Al Saud royal family. It was on this site that the First Saudi State was established in 1727. Dating back to 1446, the settlement of Diriyah housed generations of leaders.

By 2030, this mixed-use destination will span 14 square kilometers and feature 42 hotels, over 100 restaurants, nine museums, and around 30,000 residences. The project is expected to generate 178,000 direct jobs and contribute 70 billion riyals directly to the national GDP by the end of the decade, according to the Public Investment Fund (PIF).

Saudi Arabia's Vision 2030 strategy aims to diversify the economy away from oil and enhance the country's appeal as a global travel destination. The kingdom seeks to elevate the tourism sector's contribution to its economy to 10% by 2030, up from 3% in 2019.

 

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With ambitions to attract approximately 100 million domestic and international visitors in 2023, the tourism sector is set to contribute nearly 6% to the GDP this year. The government is also making significant investments in new tourist attractions, resorts, entertainment, the Riyadh Air carrier, and the King Salman International Airport in Riyadh. Saudi Arabia is a sole bidder to host the 2034 FIFA World Cup and is vying for the World Expo 2030 in Riyadh.

Despite global supply chain bottlenecks and labor shortages, Inzerillo remains optimistic about the project's progress, emphasizing that it is slightly ahead of schedule. He highlighted the return on investment in natural and cultural heritage projects and emphasized the attractiveness of entering the G20 market, with a population exceeding 30 million.

 

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As for the impact of regional conflicts, Inzerillo stated, "We know the Crown Prince [Mohammed bin Salman] is working unbelievably hard on trying to find a peaceful solution to the region... but our instructions are: 'We'll handle the diplomatic side of what's happening in the region, you focus on the goals of Vision 2030 and take care of what you're mandated to do.' So we have our marching orders."

Diriyah Company plans to "open, ground-break, and announce projects" every December until 2030, with a soft opening of its first 141-room hotel scheduled for next month.

Source: https://www.thenationalnews.com/