SEDCO Holding (“SEDCO”), a leading Saudi investment company, announced completion the sale of its fully owned subsidiary Al-Jazeera Equipment Company Limited (AutoWorld) to United International Transportation Company (Budget Saudi), in exchange for a stake in Budget Saudi. The completion of this transaction saw Budget Saudi increasing its share capital from SAR 711.6 million to SAR 781.6 million through the issuance of 7 million new ordinary shares. The new shares represent 8.96% of Budget Saudi’s share capital after the capital increase, owned directly and indirectly by SEDCO Holding making it a major shareholder in the largest auto rental and leasing company in the region.

 

This is considered the largest deal in Budget Saudi’s history to date, The deal integrates all AutoWorld’s assets and operations into Budget Saudi’s portfolio.  This strategic expansion raises Budget Saudi’s combined fleet to 50,000 vehicles, enhancing its combined marketplace presence in the automotive sector.

 

This move is a significant milestone in SEDCO’s transformation into an active strategic financial investor reinforcing the successful implementation of its business strategy of backing strong local businesses. The bespoke transaction structure demonstrates SEDCO’s ability to identify and execute investments in robust organizations with significant growth potential. The investment comes on the back of the auto rental and leasing sector growth to date, Budget’s strong leadership and exceptional performance, and the anticipated growth in the auto rentals and leasing sector.

 

 

Rayyan Nagadi, CEO of SEDCO Holding, stated, “We are pleased to undertake this milestone transaction with Budget Saudi. We are fortunate that our government has created a supportive ecosystem that fosters the success of such transformative deals. This transaction showcases SEDCO’s confidence in the Saudi market and dedication to investing in promising Saudi sectors that have high growth potential. It also reflects SEDCO’s dedication to growth and value creation within its investment portfolio and its ability to generate significant return on investment. We look forward to enhancing our market leadership and delivering value to our stakeholders.”

 

 

Commenting on the transaction, Fawaz Danish, President & Group CEO, Budget Saudi, said: “The strategic acquisition of AutoWorld provides a robust platform for future growth opportunities, bolstered by the strong KSA real economy, structural changes in the transportation sector, and the flourishing tourism industry. This deal, the first of its kind in Budget Saudi’s history, enables us to lay the groundwork for strategic initiatives that drive sustainable growth, enhance competitiveness, and create shareholder value.”

 

SEDCO’s Chief Investment Officer – Domestic Investments and Budget Saudi board member Ossama Banaja commented saying that “Having established AW over 40 years ago and growing it into one of the top long-term auto leasing companies in Saudi Arabia, SEDCO see that this transaction opens the company’s next chapter of growth under the banner of Budget Saudi. We are excited about the growth potential of the combined entities and look forward to backing Budget Saudi’s growth strategy and strengthen its market leadership”.