TOKYO: Japan-based SoftBank Group confirmed Wednesday it will pump billions of dollars into struggling start-up WeWork, in a deal that ups its stake in the office-sharing firm to around 80 percent.
The package, which involves new financing, speeding up already pledged money and a new tender offer for existing shareholders, is worth a total of $9.5 billion.
It will see co-founder Adam Neumann, who has already been forced to step down as chief executive, exit the board for an “observer” role.
SoftBank Group’s Marcelo Claure will take over as executive chairman of the board.
The agreement caps a turbulent period for the once-vaunted start-up, which was valued by some at around $47 billion at the start of the year, and represents a significant shot in the arm as the company haemorrhages money.
“SoftBank has decided to double down on the company by providing a significant capital infusion and operational support,” SoftBank Chairman Masayoshi Son said in a statement.
“The new capital SoftBank is providing will restore momentum to the company and I am committed to delivering profitability and positive free cash flow,” added Claure in the statement.
The package includes $5 billion in new financing, as well as a commitment to speed up an existing pledge of $1.5 billion.
SoftBank will also launch a tender offer of up to $3 billion for existing shareholders, at a price of $19.19 a share, expected to start in the fourth quarter of 2019.
SoftBank, which already held 29 percent of WeWork, will increase its stake to “approximately 80 percent,” but said this did not constitute taking control of the firm.
The firm said it would not hold a majority of voting rights at any general stockholder meeting or board of directors meeting and “does not control the company.”
“WeWork will not be a subsidiary of SoftBank. WeWork will be an associate of SoftBank,” the statement said.
The plan provides much-needed funds for the troubled company, which sources have said must raise at least $3 billion to cover its financing needs through the end of the year.
A source told AFP the deal will give Neumann $1 billion for his SoftBank shares, $500 million for reimbursements of personal debts and $185 million in consulting fees.
He will also maintain a small stake in the company, the source said.
The deal follows months of tumult for WeWork, which has gone from star status as one of the world most highly rated start-ups to a case study in overvaluation for some analysts.
Neumann stepped down as chief executive in September amid questions over perceived self-dealing between his personal assets and WeWork, and over unconventional personal conduct, including drug use.
And in late September the firm canceled a plan to go public amid questions over its profitability prospects for the long run.
“Hopefully, this marks the beginning of the end of using IPOs on hyped-up loss-making unicorns as a profit-taking opportunity before the music stops,” wrote Jeffrey Halley, senior market analyst for Asia-Pacific at OANDA, in a note.
WeWork, which launched in 2010, has touted its model as revolutionizing commercial real estate by offering shared, flexible workspace arrangements, and has operations in 111 cities in 29 countries.
In some cities, it is one of the major landlords, but its model of offering flexible, short-term leases, is viewed by some as less of a selling point and more of a liability for investors.
The saga has been a cloud hanging over SoftBank’s Son, but he has remained steadfastly committed to the firm, insisting its challenges are surmountable.
“It is not unusual for the world’s leading technology disruptors to experience growth challenges as the one WeWork just faced,” Son said in the SoftBank statement Wednesday.
“We remain committed to WeWork, its employees, its member customers and landlords.”
SoftBank confirms multibillion-dollar bailout for WeWork
SoftBank confirms multibillion-dollar bailout for WeWork
- The agreement caps a turbulent period for the once-vaunted start-up, which was valued by some at around $47 billion at the start of the year
- WeWork, which launched in 2010, has touted its model as revolutionizing commercial real estate by offering shared, flexible workspace arrangements
Saudi Arabia to welcome Middle East’s first TRIBE hotel in King Salman Park
- TRIBE Riyadh King Salman Park hotel will feature two restaurants, meeting facilities, banquet hall, gym, and swimming pool
- TRIBE Living will introduce 150 apartments ranging from studios to three-bedroom units
RIYADH: French hospitality group Accor and Naif Alrajhi Investment have signed an agreement to bring the Middle East’s first TRIBE hotel to Saudi Arabia.
The project, featuring a 250-key property, will be situated within Riyadh’s King Salman Park and will include the debut of TRIBE Living, a new residential community concept.
The collaboration builds on the partnership between the two entities, which successfully launched Fairmont Ramla Serviced Residences last year, according to a press release.
This initiative aligns with Saudi Arabia’s Vision 2030, which aims to diversify the economy and boost the tourism sector, targeting 150 million annual visitors by 2030.
“The introduction of TRIBE and TRIBE Living to Saudi Arabia showcases our focus on design-led, lifestyle experiences that meet the growing demand for modern, accessible hotel offerings in Riyadh,” said Duncan O’Rourke, Accor’s CEO for premium, midscale and economy brands for Middle East, Africa and Asia Pacific.
The TRIBE Riyadh King Salman Park hotel will also feature two restaurants, meeting facilities, a banquet hall, a gym, and a swimming pool.
TRIBE Living will introduce 150 apartments ranging from studios to three-bedroom units, offering residents access to the hotel’s dining and recreational amenities, the release added.
Since its launch in 2017, the TRIBE brand has grown to 18 hotels with 2,708 rooms globally.
Riyadh is emerging as a global hub for business and leisure, fueled by growing demand for premium accommodations. Accor aims to capitalize on this trend with 1,683 operational keys in the city and 2,740 in the pipeline.
The announcement follows the King Salman Park Foundation’s plan to develop its first real estate investment plot in collaboration with Naif Alrajhi Investment.
“We are delighted to be working with Accor once again, a trusted partner, to introduce new and iconic brands to the local market for the first time. This partnership is a significant step forward in our ongoing commitment to delivering world-class destinations that cater to both local and international audiences,” Naif Saleh Al-Rajhi, chairman and CEO of Naif Alrajhi Investment.
The project is part of King Salman Park’s Package 1, a 290,000-sq.-meter mixed-use development featuring residential, commercial, retail, and recreational spaces. The district is strategically located near the park’s key attractions, such as the Royal Arts Complex and Visitors Pavilion.
Accor is planning substantial growth in the Kingdom, with 45 new establishments and 9,800 keys expected by 2030, O’Rourke told Arab News in May.
Saudi Arabia’s hospitality sector has gained momentum, driven by large-scale events such as Riyadh Season and AlUla Season.
A report by JLL released earlier this month highlighted that urban infrastructure development is creating new opportunities in the Kingdom, driven by the government’s push for economic diversification and increased tourism.
Closing Bell: Saudi main index closes in green, reaches 11,949 points
- MSCI Tadawul Index increased by 15.52 points, or 1.05%, to close at 1,500.07
- Parallel market Nomu lost 285.18 points, or 0.91%, to close at 30,953.11 points
RIYADH: Saudi Arabia’s Tadawul All Share Index increased by 0.84 percent or 99.42 points to reach 11,948.79 points on Monday.
The total trading turnover of the benchmark index was SR4.9 billion ($1.3 billion), as 111 of the listed stocks advanced, while 117 retreated.
The MSCI Tadawul Index also increased by 15.52 points, or 1.05 percent, to close at 1,500.07.
The Kingdom’s parallel market Nomu dropped, losing 285.18 points, or 0.91 percent, to close at 30,953.11 points. This comes as 32 of the listed stocks advanced while 51 retreated.
The main index’s top performer, Zamil Industrial Investment Co., saw a 4.31 percent increase in its share price to close at SR33.90.
Other top performers included Saudi Reinsurance Co., which saw a 4.20 percent increase to reach SR47.15, while the Mediterranean and Gulf Insurance and Reinsurance Co.’s share price rose by 4.16 percent to SR23.52.
Red Sea International Co. also recorded a positive trajectory, with share prices rising 3.89 percent to reach SR56.10.
Kingdom Holding Co. also witnessed positive gains, with 3.75 percent reaching SR9.13.
National Co. for Learning and Education was TASI’s worst performer, with the firm’s share price dropping by 3.94 percent to SR204.60.
Aldrees Petroleum and Transport Services Co. followed with a 3.84 percent drop to SR120.20. Riyadh Cement Co. also saw a notable drop of 3.61 percent to settle at SR32.05.
Walaa Cooperative Insurance Co. and MBC Group Co. were among the top five poorest performers, with shares declining by 3.52 percent to settle at SR17.56 and by 3.17 percent to sit at SR54.90, respectively.
On the announcement’s front, Almujtama Alraida Medical Co. disclosed that Khabeer Althanyia Investment Co. — a major shareholder — has announced its intention to distribute and deposit its 630,673 shares in Almujtama Alraida, representing 6.64 percent of the company’s capital, into the investment portfolios of its current partners.
The move, according to a filing on Tadawul, will result in changes to the list of the company’s major shareholders.
Almujtama Alraida Medical Co.’s share price dropped 2.91 percent on Monday to settle at SR30.05.
Najran Cement Co. announced that its shareholders approved the transfer of SR163.62 million from its statutory reserve, as reported in its financial statements for the year ending Dec. 31, 2023, to its retained earnings balance of SR138.15 million.
The decision was made during the company’s extraordinary general meeting held on Dec. 22, according to a statement on Tadawul.
Shareholders also approved the repurchase of up to 17 million shares to be held as treasury shares, citing the board’s view that the company’s stock is trading below its fair value.
The share buyback will be financed through the firm’s resources, including cash balances or credit facilities, with the board authorized to complete the process within 12 months of the meeting date.
The repurchased shares can be retained for a maximum of 10 years, after which the company will comply with applicable laws and regulations, the statement said.
Najran Cement Co.’s share price saw a 1.22 percent dip on Monday to close at SR8.92.
Saudi Arabia inaugurates Yanbu Grain Terminal to boost food security, trade
- Yanbu Grain Handling Terminal will serve public and private sector importers
- It boasts a storage capacity of 156,000 tonnes, including 12 silos with a combined capacity of 96,000 tonnes
RIYADH: Saudi Arabia has inaugurated the Yanbu Grain Handling Terminal, underscoring the Kingdom’s efforts to strengthen public-private partnerships, enhance agricultural trade, and bolster food security across the region.
The event was attended by Abdulrahman Al-Fadli, minister of environment, water and agriculture, and by various government and private sector officials, according to the Saudi Press Agency.
The Yanbu Grain Handling Terminal will serve public and private sector importers, and boasts a storage capacity of 156,000 tonnes, including 12 silos with a combined capacity of 96,000 tonnes.
Food security has risen up the agenda in recent years, as countries in the Gulf contend with the impacts of climate change, the consequences of trade-disrupting conflicts such as the Ukraine-Russia war, and interruptions to supply routes through the Red Sea.
In September 2022, in response to these challenges, the Kingdom collaborated with regional partners to launch a food security action plan with an initial funding of $10 billion.
The Yanbu Grain Handling Terminal will be operated by the National Grains Co., a joint venture between the national shipping carrier Bahri and the Saudi Agricultural and Livestock Investment Co.
It features a 650-meter conveyor belt and a discharge rate of 800 tonnes per hour directly from ships, with an annual handling capacity exceeding 3 million tonnes of grain.
According to Bahr’s statement to the Saudi Stock Exchange, the inauguration delay was caused by the inclusion of additional requirements to enhance future operational efficiency, along with the construction of extra infrastructure to accommodate potential future expansions.
The company said that because of this the total project cost rose by 7 percent from the initially allocated SR412.5 million ($109.7 million), though the increase is not deemed significant.
The Yanbu Grain Handling Terminal aims to become a world-class logistics hub, connecting three continents and supporting the Kingdom’s vision for a resilient and efficient agricultural supply chain.
Established in 2020 as a strategic partnership between SALIC and Bahri, the National Grain Co. aims to fulfill the Kingdom’s future feed grain requirements while enhancing its global competitiveness.
It is committed to advancing grain trade, handling, and storage through the Yanbu terminal, strengthening supply chains and ensuring price stability across Saudi Arabia.
SALIC, a Public Investment Fund-owned company, was formed in 2011 to secure food supply for Saudi Arabia through mass production and investment.
When the project was announced in 2020, Al-Fadli, who is also the chairman of SALIC’s board of directors, said: “The project aims to enhance the velocity of the main grain influx to Saudi Arabia and is considered the first regional center for grains in the commercial port of Yanbu.”
He added that SALIC relies on the geographical location of the Kingdom and the port infrastructure to enhance food distribution in the region by linking the Kingdom to global grain sources, especially countries where SALIC is investing.
A grain delivery service to customers within the Kingdom has been introduced as part of the project, ensuring greater proximity to clients, enhanced customer experience, and improved profitability margins.
UAE’s ADNOC boosts drilling capabilities with 2 new jack-up rigs
- ADNOC Drilling will expand its fleet to 142 platforms
- UAE possesses the sixth-largest crude oil reserves globally
JEDDAH: The Abu Dhabi National Oil Co. has received two new jack-up rigs, reinforcing its position as one of the largest drillship fleet owners globally.
ADNOC Drilling will launch the new rigs by the first quarter of next year, expanding its fleet to 142 platforms. This marks a strong year for the company, showcasing its performance and strategy, according to UAE state news agency WAM.
For over 50 years, ADNOC Drilling has been the exclusive provider of drilling and rig-related services to ADNOC Group under agreed contractual terms, supporting the firm’s upstream operations in exploring and developing oil and gas resources in the UAE.
With most of the Gulf country’s crude oil and gas reserves located in Abu Dhabi, ADNOC oversees the majority of nationwide exploration, appraisal, development, and production activities, which are managed by ADNOC, either independently or in partnership with third parties.
In its analysis of the company’s performance, JPMorgan, a global financial services firm, said: “Since its initial public offering, ADNOC Drilling has proven to be a high-quality, defensive business, consistently meeting and surpassing guidance and expectations. The exceptional performance also reflects positive progress with ADNOC Drilling’s two joint ventures.”
The UAE possesses the sixth-largest crude oil reserves globally, with approximately 107 billion stock tank barrels of proven oil reserves. Since its inception in 1972, ADNOC Drilling has played a crucial role in enabling ADNOC to unlock the country’s oil and gas resources efficiently and reliably, contributing to the nation’s energy sector.
This year, Enersol, a joint venture between Alpha Dhabi Holding and ADNOC Drilling, acquired four oilfield services technology companies, while Turnwell, another business partnership between ADNOC, SLB, and Patterson-UTI, set a record for initial well delivery time, accelerating the development of the UAE’s unconventional energy reserves.
Following its second upward guidance revision this year alongside its third-quarter results, ADNOC Drilling is on track to deliver its best-ever performance in Q4. ADNOC Drilling anticipates at least mid-single-digit expansion as it scales operations, according to WAM.
ADNOC forecasts a rise in drilling activity in the coming years, driven by its commitment to increasing crude oil production capacity by 25 percent, reaching five million barrels per day by 2027.
As the company looks to expand beyond the UAE and explore opportunities in the region, it foresees a growing need to expand its rig fleet to support its strategic growth plans.
The energy giant believes that expanding its rig fleet will enhance its current capabilities in rig hire, drilling, completion services, and associated operations and enable the company to offer unconventional drilling and biogenic well services. This expansion is expected to contribute to increased revenue and profitability.
Terminal 4 at Cairo International Airport to boost Egypt’s aviation and tourism sectors
- Project is expected to bolster the country’s tourism goals and improve traveler experiences
- Egypt’s aviation sector also improved 36 spots to 27th in the 2024 edition of the Air Transport Infrastructure Index
RIYADH: Egypt is advancing its aviation sector with the ongoing development of Terminal 4 at Cairo International Airport, set to accommodate 30 million passengers annually.
According to a statement from the Cabinet, the “New Republic Air Gateway” project is expected to bolster the country’s tourism goals, improve traveler experiences, and position Egypt as an international aviation hub.
This year, the government announced plans to involve the private sector in airport management, including a global tender for Cairo International.
Egypt’s aviation sector also improved 36 spots to 27th in the 2024 edition of the Air Transport Infrastructure Index, aligning with Vision 2030’s focus on sustainable development, innovation, and global competitiveness.
Prime Minister Mostafa Madbouly, during a meeting at the New Administrative Capital, reviewed progress on the project alongside Minister of Civil Aviation Sameh El-Hefny. The session focused on the terminal’s specifications, implementation strategy, and potential to reshape the African nation’s aviation and tourism landscapes.
“Airport development works come within the framework of presidential directives to upgrade the Egyptian airport system, raise its capacity and improve the level of services provided to passengers,” he said.
At the meeting, Madbouly emphasized the importance of creating world-class facilities to accommodate rising traveler numbers.
El-Hefny outlined the project’s phased execution, with completion expected within four to five years. He also revealed that negotiations are underway with international firms specializing in airport construction and management to ensure world-class execution.
The minister emphasized the cutting-edge features of the new terminal, including its ability to initially handle 30 million passengers annually, with expansion potential to 40 million.
In September 2023, Cairo Airport Co. partnered with Pangiam, a trade and travel technology company, and signed two agreements to develop the new terminal. These deals, focused on enhancing the airport’s operations with advanced technology, include a feasibility study to incorporate emerging technologies and deliver a seamless travel experience.
The terminal will feature a state-of-the-art runway equipped with advanced navigation and lighting technologies that meet international standards.
Once operational, Terminal 4 is expected to elevate Cairo International Airport’s global status, making it a hub for regional and international travel.
