Citigroup Said Hired for First Saudi Arabia Deal After Reopening

(Bloomberg) -- Citigroup Inc. won its first local mandate in Saudi Arabia as the U.S. lender returns to the kingdom after a 13-year absence.

The bank is advising budget carrier FlyNas LLC on its initial public offering along with Morgan Stanley and NCB Capital, people familiar with the matter said. The airline, partly owned by Prince Alwaleed Bin Talal’s Kingdom Holding Co., plans to sell shares by the end of the year or early 2019, the people said, asking not to be identified because the information is private.

Citigroup is rebuilding its operations in Saudi Arabia after exiting in 2004. The lender lost its license in the country when it sold its stake in Samba Financial Group. While the bank has played key roles on the kingdom’s record-breaking $17.5 billion bond sale in 2016 and $9 billion Islamic bond offering last year, it faced restrictions working on deals that were signed in Saudi Arabia or takeovers in which the target company was based there.

With the investment banking license Citigroup received in April, the New York-based bank can pitch for local advisory work, including IPOs and takeovers in which the target company is based in the kingdom.

Hiring Bankers

The bank plans to build a team of 15-20 employees on the ground, Carmen Haddad, chief executive officer of Citigroup’s Saudi Arabian business, said in December. It hired Majed Al Hassoun as head of investment banking and former Societe Generale SA banker Fathi Al-Tarouti to head markets, people familiar with the matter said in November. Citigroup said it held its inaugural board meeting for its Saudi unit in January.

Saudi Arabia is becoming more attractive to foreign lenders as it overhauls its economy, looks to sell off state assets and attract more foreign investors. A key part of those plans is the IPO of Saudi Arabian Oil Co., or Aramco, in what could be the largest share sale. The nation’s stock exchange, the biggest in the Middle East, may also be upgraded to emerging market status by two major index providers this year.

FlyNas, which began operations as Nas Air in 2007, has been weighing a share sale since 2008 and would be the first airline to be listed on the stock exchange. FlyNas, Citigroup and Morgan Stanley declined to comment, while NCB Capital didn’t immediately respond to requests for comment.

To contact the reporters on this story: Matthew Martin in Dubai at mmartin128@bloomberg.net, Dinesh Nair in London at dnair5@bloomberg.net, Glen Carey in Riyadh at gcarey8@bloomberg.net.

To contact the editors responsible for this story: Stefania Bianchi at sbianchi10@bloomberg.net, Shaji Mathew

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