SAUDI ARABIA-based Al-Tayyar Travel Group plans to raise SR1.2 billion riyals ($320 million) from an initial public offering (IPO) to part finance large-scale expansion.
Reuters reported that the company is eyeing a 30-per cent stake in a UK counterpart and will offer shares in April in the first IPO by a travel services company on the Saudi bourse.
“We are offering 24 million shares and expect to raise about SR1.2 billion,” Nasser Al-Tayyar, the company’s president, told Reuters in Jeddah.
Al-Tayyar, which organises holiday packages, has a corporate car rental service and arranges flight bookings and residential services, plans to offer shares from April 22 to 28.
With offices in the Middle East, Thailand, India, Malaysia, Canada and the US it plans to spend SR500 million over the next two years on expansion.
The growth will be funded through current capital and bank loans.
“The expansion that we are planning 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,” said Al-Tayyar.
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 per cent of the firm.” He added that the company feels it is a good time to invest in travel opportunities because of the troubles experienced by the industry during the global economic
In Saudi Arabia, Al-Tayyar wants to increase its offices from 250 to 277 this year as well as doubling its fleet of 800 rental cars within three years.
For 2009 the company expects to record an increase of more than a seven per cent in net profits to more than SR300 million, compared with SR280 million in 2008.
Al-Tayyar Group started as a family business in 1979 with capital of SR1 million, which it has boosted to SR800 million.
The group owns 30 per cent of Alshamel International, a Kuwaiti travel firm, and 30 per cent of Yemen’s Al Saeeda Airlines, among other companies in the same field.