Dubai: Standard Chartered, the British bank that earns most of its profit in Asia, bought a $75 million (Dh275 million) stake in a unit of the Saudi Bin Laden Group, the company planning to build the world's tallest tower in Saudi Arabia.
Standard Chartered took a minority stake in Construction Products Holding, Saudi Arabia's biggest manufacturer of building materials, the London-based lender said in a statement yesterday.
The investment is the first by Standard Chartered's private-equity business in Saudi Arabia, the biggest Arab economy, and gives the lender a board seat, according to the statement.
Saudi Arabia "is going to spend about $400 billion on infrastructure over the next few years," Taimoor Labib, Standard Chartered's head of private equity for the Middle East and North Africa, said in a phone interview from Dubai.
"The government is turning to tried-and-true partners with sterling reputations and who have completed projects on budget."
The Saudi Bin Laden Group won a contract last week to build the world's tallest tower in Jeddah from Kingdom Holding, the investment company controlled by Saudi billionaire Prince Al Waleed Bin Talal.
Construction Products Holding owns more than 30 manufacturing facilities in Saudi Arabia and produces cement, tiles, air-conditioning ducts and windows, Labib said. It will use the money to expand in countries including Qatar, Egypt and India, he said.
Saudi Arabia's King Abdullah Bin Abdul Aziz Al Saud announced a $130 billion spending plan in February and March, including a $100 billion package to build 500,000 homes, after pro-democracy protests toppled rulers in Tunisia and Egypt.
Standard Chartered's private-equity business has invested about $3.5 billion in companies in Asia, Africa and the Middle East since 2002, according to the statement.
In January, it completed a $75 million mezzanine investment in Bahrain-based retailer Hassan Mohammed Jawad & Sons to help it expand. Mezzanine debt is an unsecured, high-yield borrowing that ranks behind senior notes for repayment and often has an equity component in the form of shares or warrants.
Gaining a foothold
- $75m: worth of shares acquired by bank
- $400b: infrastructure to be put up in Saudi Arabia