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PIF and Seera fail to reach agreement on investment

Tourists in front of the Jabal Al-Mawaqi rock art in Saudi Arabia Eric Lafforgue/Hans Lucas via Reuters Connect
Tourists in front of the Jabal Al-Mawaqi rock art in Saudi Arabia

Saudi travel major Seera Group Holding has terminated plans for the Public Investment Fund (PIF), the kingdom’s sovereign wealth fund, to invest in its subsidiary, Almosafer Travel and Tourism Company.

The termination comes after the two companies failed to reach an agreement, Seera said in a statement to the Saudi bourse.

The statement clarified that Almosafer was fully self-sufficient and profitable, having achieved a net booking value of SAR5.7 billion ($1.52 billion) and Ebitda of SAR49 million during the first nine months of 2023.

In addition, Almosafer is expected to surpass its “historical” performance levels and exceed SAR10 billion in booking value by 2025. 

Seera has already announced plans to list its subsidiaries, including Almosafer.

Last September, PIF sought a 30 percent shareholding in Almosafer by investing SAR1.5 billion in new shares in the travel company.

The investment amount was based on a preliminary pre-money enterprise value of Almosafer and its subsidiaries of SAR3.7 billion. 

As part of the reorganisation, Seera’s destination management company, Discover Saudi, and its Hajj and Umrah business-to-business operator Mawasim, would fall under the umbrella of Almosafer. 

The Seera unit planned to use the new capital to scale its inbound, outbound, religious and domestic tourism operations. 

Seera turned to a profit of SAR148 million in the first nine months of 2023, against a loss of SAR79 million a year ago, following a rebound in global tourism.

Saudi Arabia hosted more than 100 million tourists last year, who collectively spent SAR100 billion, tourism minister Ahmed Al-Khateeb has said.

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