Saudi Government Studying Saline Water Conversion Corp Privatisation

The privatisation of Saudi Arabia’s Saline Water Conversion Corporation (SWCC) is being studied by the Supreme Economic Council and a decision on the matter is expected soon, Al Sharq Al Awsat newspaper reported on Monday, quoting unnamed sources.

SWCC, which has been working for years on plans to go public, is the kingdom’s second-largest power producer. It is also responsible for sea water desalination and the supply of potable water to Saudi coastal and inland cities.

The paper added that the corporation was ready for the privatisation process and for listing on the Saudi stock exchange, once a decision by the authorities to proceed has been taken. It didn’t give more details.

SWCC’s current head Abdulrahman Mohammed al-Ibrahim could not be reached for comment when contacted by Reuters on Monday.

In October 2011, Fuhaid bin Fahd al-Sharif, then SWCC’s head, told Al Iqtissadiya newspaper the privatisation process will include establishing a joint stock company with a capital exceeding SAR60 billion ($16 billion), 30 per cent of which will be sold to the public in an initial public offering.

The largest electric power producer in the kingdom is Saudi Electricity Company, which has a market capitalisation of around $17 billion and is currently the sixth-largest stock by value on the kingdom’s bourse.

Saudi Arabia is expected to open its stock market, by far the largest in the Middle East, to direct foreign investment for the first time during the opening half of 2015, creating additional impetus for Saudi companies to go public.

Among the firms believed to be eyeing a flotation include power plant developer ACWA Power and hospital firm Sulaiman Al-Habib Medical Group, as well as the stock market itself.