Citadel Capital Eyes Saudi Arabia’s Promising Private Equity Market

Citadel Capital, the Cairo based private equity firm, sees immense potential in Saudi Arabia as the world's largest oil producer builds a broad based economy and continues to liberalize and modernize its business climate

The leading private equity firm in the Middle East and Africa is actively reviewing investment opportunities in the Kingdom of Saudi Arabia, top company officials said today.

Citadel Capital (CCAP.CA on the Egyptian Stock Exchange), which controls investments of US$ 8.3 billion in 15 industries spanning 14 countries, is looking closely at opportunities in Saudi Arabia. The firm was founding partner of the “Outlook Saudi Arabia—Investment and Private Equity Forum 2010,” which took place in Riyadh earlier this week in partnership with the Saudi Arabian General Investment Authority (SAGIA).

“Saudi Arabia has long been on the private equity map as a source of funding, but today it has also become a very attractive investment destination,” said Citadel Capital Chairman and Founder Ahmed Heikal. “A long-standing commitment to market modernization and advantageous macroeconomic fundamentals are moving the KSA’s domestic market onto the global stage. Its advantages as an energy rich country, meanwhile, and the government’s commitment to infrastructure build up and other investment support a unique opportunity for private equity investors.”

“The challenges of 2009 saw a slowdown in bank credit to the private sector,” noted Citadel Capital Managing Director and Co-Founder Hisham El-Khazindar. “This development has created a nascent market for corporate control as well as a rising awareness of both the importance of non-bank financing and of the added-value that world-class private equity players can bring.”

“The broad diversification efforts underway in the Kingdom have created new opportunities for private-sector players beyond oil and gas, the country’s traditional investment driver, Heikal added. “Saudi Arabia’s latest budget, with projected spending of SAR 540 billion, is its largest ever. Moreover, the Kingdom has a project pipeline worth more than US$ 692 billion widely distributed across construction, petrochemical, oil and gas, infrastructure and power projects.”

Demographic appeal also factors as a significant support to private investment in Saudi Arabia. With a population of more than 25 million growing at an average rate of 2.2% over the past decade, domestic demand and spending are rising rapidly, and consumers are under-leveraged by both regional and global standards.

“The real value-added of private equity comes in form of a long-term approach that allows investors to build potential and harness opportunities, whether these be industrial or consumer based,” said El-Khazindar. “Saudi Arabia has long been overlooked as a destination for investment funds, but this will change in the medium term amid the liquidity crunch and the expected liberalization of foreign investment regulations in the medium-term.”

Private equity activity in the Middle East and North Africa (MENA) has largely been dominated by Egypt, which attracted 24% of industry investments by value in 2009 (excluding Citadel Capital’s US$ 1 billion investment in Egyptian Refining Company), according to industry data. Saudi Arabia, long the region’s largest economy and the world’s largest oil producer, attracted a 17% share of MENA private equity investments.

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Citadel Capital (CCAP.CA on the Egyptian Stock Exchange) is the leading private equity in the Middle East and Africa. Citadel Capital focuses on building regional platforms in select industries through acquisitions, turnarounds, and greenfields executed via Opportunity Specific Funds. Citadel Capital’s 19 OSFs now control Platform Companies with investments worth more than US$ 8.3 billion in 14 countries spanning 15 industries, including mining, cement, transportation, food and energy. Since 2004, the firm has generated more than US$ 2.5 billion in cash returns to its co-investors and shareholders (on investments of US$ 650 million), more than any other private equity firm in the region. Citadel Capital is the largest private equity firm in Africa by PE assets under management (2004-2009, as ranked by Private Equity International). For more information, please visit www.citadelcapital.com.

For more information, please contact:

Ms. Ghada Hammouda
Head of Corporate Communications
Citadel Capital (S.A.E.)

g...@qalaaholdings.com (click to reveal this email)

Tel: +20 2 2791-4440 • Fax: +20 22 791-4448
Mobile: +20 16 662-0002