Saudi Arabian Airlines has signed a deal with an affiliate of French investment bank Calyon to advise on an initial public offering of its catering company, said state news agency SPA.
The airline, one of the Middle East's largest carriers, has launched a gradual privatisation of its catering, cargo, maintenance, ground services and aviation services units to pave the way for flotation of a stake in its core transport unit. The airline also signed an agreement with US bank Morgan Stanley and an investment unit of state-run National Commercial Bank to advise on plans to privatise its core unit, SPA said.
The report on the agreement with Calyon Saudi Fransi, part of the Banque Saudi Fransi group, did not specify a date for the IPO.
In October, an airline official indicated that the IPO offering 30 per cent of the catering unit would be held around the third quarter of 2010. In July, a committee of Saudi Arabia's advisory Shura Council recommended an IPO for the airline, instead of selling off its units piecemeal in a privatisation effort. The airline has already sold to private investors a 49 per cent stake in the catering unit and 30 per cent of its cargo unit.
The airline also signed an agreement to merge its ground services company with two Saudi counterparts, SPA said.