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Mon 22 Mar 2010 01:15 AM

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Calyon unit to advise Saudi Air on caterer IPO

Airline also signs deal with Morgan Stanley to advise on privatisation plans for core unit.

Calyon unit to advise Saudi Air on caterer IPO
SIGNED DEAL: Saudi Arabian Airlines signed a deal with an affiliate of French investment bank Calyon to advise on an IPO of its catering company. (Getty Images)

Saudi Arabian Airlines signed a deal on Sunday with an affiliate of French investment bank Calyon to advise on an initial public offering of its catering company, state news agency SPA said.

The airline, one of the Middle East's largest carriers, launched a gradual privatisation of its catering, cargo, maintenance, ground services and aviation services units to pave the way for a 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, the agency said, without giving details.

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 percent 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 percent stake in the catering unit and 30 percent of its cargo unit.

The airline also signed an agreement on Sunday to merge its ground services company with two Saudi counterparts, the agency said. It did not give financial details of the merger. (Reuters)

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