Saudi travel giant plans $147mn IPO

Al-Tayyar Travel Group, Saudi Arabia's biggest privately owned travel firm, said it aims to raise about 550 million riyals ($146.7 million) in an initial public offering before April to help finance acquisitions.

The firm plans to sell 30% of its shares as it seeks to tap Saudi demand for foreign travel, and the international market for Muslim pilgrimages to Mecca and Medina from as far apart as the United States and Australia, the company President Nasser Al-Tayyar told reporters in Dubai on Wednesday.

The 27-year-old company would use about 150 million riyals of the funds to finance acquisitions in Saudi Arabia, Australia and Lebanon, he told Reuters later.

"We are negotiating with a few companies in Australia to buy travel agencies," he said on the sidelines of the Dubai air show, declining to be more specific.

Al Tayyar Travel also wants to expand its network in the United States and Malaysia to tap the market for pilgrims visiting Islam's two holiest sites, Al Tayyar said.

Malaysia, a majority Muslim country, is also a favourite destination for Saudi travellers, he said.

"We want to be a larger company in the travel market," Al Tayyar said. "We want to extend operations into Malaysia and the U.S. where we provide travel agency services for haj and umrah."

Umrah is the Arabic term for pilgrimages to Mecca outside the annual haj pilgrimage, which can last as long as two weeks. About 1 million international visitors travel to Saudi Arabia for the haj.

Al Tayyar Travel said last year it planned a 1 billion riyal IPO in 2007.

Some 40 firms will sell shares to the public in Saudi Arabia next year, in offerings worth up to $8 billion, or twice this year's total, the investment banking unit of state-owned National Commercial Bank said on Sunday.

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