JEDDAH, Saudi Arabia (Reuters) – Saudi-based Al-Tayyar Travel Group said it plans to raise 1.2 billion riyals ($320 million) from an initial public offering and is eyeing a 30 percent stake in a UK counterpart as part of an expansion.
The Riyadh-based firm plans to offer shares next April in the first IPO by a travel services company on the Saudi bourse, the largest in the Arab world.
“We are offering 24 million shares and expect to raise about 1.2 billion riyals,” Nasser Al-Tayyar, the company’s president, told Reuters late on Saturday in Jeddah.
The company, which organizes holiday packages, has a corporate car rental service and arranges flight bookings and residential services, plans to offer shares from April 22 to 28 from existing shareholders.
Al-Tayyar — with offices in the Middle East, Thailand, India, Malaysia, Canada and the United States — plans to spend 500 million riyals over the next two years to expand.
The expansion will be funded through current capital and bank loans.
“The expansion that we are planning for includes investing in companies, especially in light of the current (difficult) conditions that travel companies are facing, in order to find opportunities in travel and tourism,” he said.
The firm wants to invest in the UK and is also looking at Australia.
“We are in talks to buy a share in a firm, a group of companies, in Britain…it is in the same field that we are,” he said, declining to give more details. “We are thinking of buying 30 percent of the firm.”
In Saudi Arabia, Al-Tayyar wants to increase its number of offices to 277 from 250 next year as well as doubling its fleet of rental cars within three years.
“We currently have 800 cars, we would like to double that fleet,” he said.
For this year, al-Tayyar expects more than a 7 percent increase in net profits to above 300 million riyals, compared with 280 million in 2008.
Al-Tayyar Group started as a family business in 1979 with capital of 1 million riyals, which it has boosted to 800 million.
The group owns 30 percent of Alshamel International, a Kuwaiti travel firm, and 30 percent of Yemen’s Al Saeeda Airlines, among other companies in the same field.