Al Tayyar targets SR1.2bn in first Saudi travel IPO

Saudi-based Al Tayyar Travel Group plans to raise SR1.2 billion (Dh1.17bn) from an initial public offering and is eyeing a 30 per cent stake in a United Kingdom 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 SR1.2bn," Nasser Al Tayyar, the company's President, said.

The company, 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 from existing shareholders.

Al Tayyar – with offices in the Middle East, Thailand, India, Malaysia, Canada and the United States – plans to spend SR500 million 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 per cent 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 seven per cent increase in net profits to above SR300m, compared with SR280m in 2008.

Al Tayyar Group started as a family business in 1979 with capital of SR1m, which it has boosted to SR800m.

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.

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