MBC, which was founded more than 30 years ago, operates several popular television channels and digital platforms across the Middle East and North Africa region. Photo: MBC Group
MBC, which was founded more than 30 years ago, operates several popular television channels and digital platforms across the Middle East and North Africa region. Photo: MBC Group

Saudi Arabia’s Public Investment Fund to take a majority stake in MBC Group for about $2 billion



Saudi Arabia’s Public Investment Fund (PIF) will acquire a 54 per cent stake in regional broadcaster MBC Group for 7.47 billion Saudi riyals ($1.99 billion) as the kingdom’s sovereign wealth fund boosts domestic investments.

Istedamah Holding Company, a major shareholder in MBC, has agreed to sell its stake in the media company to the PIF in a private transaction at 41.60 riyals per share, MBC said on Sunday in a filing to the Tadawul, where its shares are traded.

The closing of the deal is subject to regulatory approvals, the filing said.

Shares of MBC closed 10 per cent up on the Tadawul after the announcement on Sunday.

PIF will make cuts to its portfolio of foreign assets and focus more on domestic markets as it looks to establish the kingdom as the global centre of artificial intelligence, its governor Yasir Al Rumayyan said last week.

The fund, with $930 billion of assets under management, plans to cut its foreign portfolio by about a third as “there is a big paradigm shift in how PIF is deploying investments”, he said.

In August, the PIF said its assets under management increased 29 per cent to 2.87 trillion riyals last year as it solidified its Saudi holdings and diversified its international portfolio of assets.

The annualised returns for the sovereign fund since 2017 rose to 8.7 per cent last year, up from 8 per cent in 2022, the fund said in its annual report.

The shareholders' returns were “primarily driven by investments within Saudi Arabia, as well as international portfolio growth, as the PIF continued to forge strong partnerships and enhance shareholder value”, the fund said at the time.

Saudi Arabia, which is diversifying its economy away from oil, continues to maintain its appeal as a foreign direct investment destination, despite an increase in geopolitical uncertainty in the region, which underpins that the Vision 2030 programme is working.

MBC, which was founded more than 30 years ago, operates several popular television channels and digital platforms across the Middle East and North Africa region.

In December, the company raised 831 million riyals in an initial public offering after pricing it at the top of the range. The company set the final offering price at 25 riyals a share, for its offering of a 10 per cent stake amid “robust investor demand”.

Your rights as an employee

The government has taken an increasingly tough line against companies that fail to pay employees on time. Three years ago, the Cabinet passed a decree allowing the government to halt the granting of work permits to companies with wage backlogs.

The new measures passed by the Cabinet in 2016 were an update to the Wage Protection System, which is in place to track whether a company pays its employees on time or not.

If wages are 10 days late, the new measures kick in and the company is alerted it is in breach of labour rules. If wages remain unpaid for a total of 16 days, the authorities can cancel work permits, effectively shutting off operations. Fines of up to Dh5,000 per unpaid employee follow after 60 days.

Despite those measures, late payments remain an issue, particularly in the construction sector. Smaller contractors, such as electrical, plumbing and fit-out businesses, often blame the bigger companies that hire them for wages being late.

The authorities have urged employees to report their companies at the labour ministry or Tawafuq service centres — there are 15 in Abu Dhabi.

Updated: November 03, 2024, 2:17 PM