Saudi’s Kingdom Holding to invest Careem proceeds in Europe, Saudi – CEO

Saudi Arabian investment firm Kingdom Holding will put the proceeds from the sale of its stake in ride-hailing startup Careem towards $600m in investments in the kingdom and Europe, its chief executive told Reuters on Friday.

Kingdom, which is 95 per cent owned by billionaire Price Alwaleed bin Talal, sold its stake in Careem this week for SAR1.25bn ($333m). It will receive SAR565m in cash, plus convertible bonds in Uber Technologies worth SAR685m.

“We have five companies on the table that are being discussed, deliberated. Hopefully we will be able to come to a conclusion on where to invest within the next eight weeks,” Talal Ibrahim Al Maiman said in a phone interview.

Some of the companies are in Saudi Arabia and some are in Europe, he said. “We’re talking about $600m or so.”

“We will not deploy all the cash in one go, but this is the first tranche,” he added. “It’s a combination of debt and equity.”

Kingdom’s investments will be directed 70 per cent into income-generating dividend-distributing investments and 30 per cent into technology and potential growth companies, he said.

Kingdom was among the first investors in Careem, the Middle East rival of Uber, which acquired it this week in a $3.1bn deal ahead of a hotly anticipated initial public offering.

Lyft, another Uber rival, was valued at $24.3bn in the sector’s first IPO on Thursday and shares opened up more than 20 per cent on Friday. Kingdom has a 2.98 per cent stake in the firm.

“If we assume exit, which we cannot of course because there’s a lock-up period, we’ve made an IRR (internal rate of return) of 53 per cent on Lyft,” Maiman said.

“We’ve made almost 100 per cent in Careem, so we’ve done very well. It’s been really a good week for Kingdom.”

Maiman said Kingdom would consider raising its investments in Lyft or Uber “if we see an opportunity there”.

He added: “I think it would be a while before Lyft looks outside North America… but the Middle East would probably be one of the best international markets versus, for example, South America or the like.”