DUBAI (Reuters) – Saudi arabian investment firm Kingdom Holding, the proceeds of the sale of its interest in the ride-hailing startup Careem in the direction of $600 million of investment in the kingdom and Europe, its chief executive told Reuters Friday.
FILE PHOTO: Careem workers walk past the head office of the company in Dubai, UAE, December 13, 2018. REUTERS/Satish Kumar/File Photo
Kingdom, 95 percent owned by billionaire Price Alwaleed bin Talal, sold its stake in Careem this week for 1.25 billion riyals ($333 million). It will receive 565 million riyals in cash, plus convertible bonds in Uber Technologies worth 685 million riyals.
“We have five companies on the table that are being discussed in consultation. Hopefully we will be able to come to a conclusion about where to invest in the next eight weeks,” Talal Ibrahim al-Maiman, said in a telephone interview.
Some of the companies are in Saudi Arabia, and some are in Europe, ” he said. “We have about $600 million, or so.”
“We will not deploy all the money at one time, but this is the first tranche,” he added. “It is a combination of debt and equity.”
Kingdom of the investment will be directed 70 percent to to generate an income from dividend distribution of the investment and 30 percent in the technology and the potential growth of the companies, he said.
Kingdom was one of the first investors in Careem, the Middle East, rival of Uber, who took over this week in a $3.1 billion deal for a hotly anticipated ipo.
Lyft, another Uber rival, was valued at $24.3 billion in the sector is the first IPO on Thursday, and shares opened up more than 20 percent on Friday. Kingdom has a 2.98% of the shares in the company.
“If we assume output, which we do not, of course, because there is a lock-up period, we have an IRR (internal rate of return of 53 percent on Lyft,” Maiman said.
“We have almost 100 percent in Careem, so we have done very well. It really is a good week for the Kingdom.”
Maiman said the Kingdom would consider the increase of the investments in Lyft or Uber “if we have a chance”.
He added: “I think it will be a while before Lyft looks from outside North-America… but the Middle East would undoubtedly be one of the best international markets versus, for example South-America or something like that.”
Reporting By Stephen Kalin; Editing by Jan Harvey