Deal signed to sell 49pc of Saudia Catering

Which is undergoing privatisation. The next strategic unit slated for privatisation is cargo.

Saudia Catering, which recorded $171.466 million (SR643 million) revenue and $37.86 million (SR142 million) net profit in 2005, was offered for privatisation in August last year and received tremendous response from investors.

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Crown Prince Sultan, who is chairman of the Saudi Arabian Airlines, signed an agreement on Sunday night selling 49 per cent of Saudia Catering to the Strategic Catering Company Ltd. (SCC), which is a consortium comprising Abdul Mohsen Al-Hokair Tourism and Development Co., Fowzan Holding and Newrest Group Holding.

The sale came after the Cabinet last month gave the national carrier the green light to convert its strategic units into separate companies in preparation to privatise the airline, the largest in the Middle East with a fleet of 120 passenger and cargo planes.

"On the basis of this decision, we'll establish six companies for catering, maintenance, cargo, ground service, aviation service, and Prince Sultan Aviation Academy," Khalid A. Al Molhem, director general of Saudi Arabian Airlines, said in a statement made available to Khaleej Times here.

"The next strategic unit slated for privatisation is cargo. We have already taken steps to activate privatisation of this unit before the end of this year," he said. It will be followed by privatisation of the ground service unit and maintenance unit. "The civil aviation service, which is the core activity of the airline, will be the last to be privatised," he added.

Al Molhem said that Saudia Catering, which has won several international awards, currently supplies 25,000 meals daily to 48 airline companies. The supply will reach 100,000 meals in peak seasons.

He said that the participation of strategic partners in the new companies would strengthen the airline, and added that the selling process would be carried out in a transparent manner. The companies will sell part of their capital in light of market share and assets, ensuring good prices for the airline.

He said that investors in each company should have the necessary qualification and experience. Offers made by investors will be opened in the presence of their representatives. "The top three bidders will be given another chance to review their bids and make final offers," he added.