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Sources say that Saudi Arabian-backed developer seeks World Cup Stadium investors

Three sources have confirmed that Saudi Arabia's ROSHN group is looking for investors to help finance its Aramco Stadium which will host the FIFA World Cup in 2034. The state-backed developer wants to 'free up capital' so it can deliver projects as part of the Kingdom's economic transformation plan.

Saudi Arabia is increasingly relying on outside capital for funding projects in tourism, sports, and logistics to reduce the economy's dependence on oil and gas revenues.

Two sources who declined to be identified because the matter was not public said that JPMorgan had hired ROSHN to manage the equity raising process.

According to a third source, PIF and ROSHN are testing the private investor interest in the stadium.

Aramco, JPMorgan and ROSHN declined to comment. PIF and ROSHN did not respond to requests for comments.

STADIUM TRANSACTION WOULD MIRROR STRUCTURE OF PIPELINE DEALS

The Aramco stadium is expected to be completed by the end this year, and will host its first match in January.

Saudi Aramco is the state-owned oil company that operates the stadium on a 25 year concession. ROSHN, as the owner and developer, owns the project.

Sources said that the transaction pursued by ROSHN will likely follow a structure of lease-and-leaseback.

Investors such as EIG Global Energy Partners, part of BlackRock, and Global Infrastructure Partners have shown interest in similar infrastructure fundraising deals.

According to the model, ROSHN will establish a vehicle that would?control the leasehold it would co-own, with the 'investors who would provide the funds upfront.

ROSHN would be able to use its capital elsewhere, as the transaction would bring in new funding from investors. Investors would in turn receive a stream of long-term income in the form a portion of Aramco's lease payments.

SAUDI ARABIA STRUGGLING WITH FLAGSHIP WORKS

PIF, as part of its Vision 2030 economic revamp plan, has heavily invested in sports including Formula E, tennis, boxing, eSports, and soccer.

The 2034 World Cup will be a major event in the Kingdom's economic transformation plan.

Riyadh has been working on building or renovating 15 stadiums in five cities, including the Aramco Stadium, which seats 47,000 people, located in Al Khobar. It also plans to create 132 training facilities.

Saudi Arabian Sports Minister Prince Abdulaziz Bin Turki AlFaisal stated this week that the 2034 competition would be the first time a nation will host the expanded 48 team format.

But overspending and ?lower-than-anticipated global oil prices that have throttled state revenues have left Saudi Arabia struggling to deliver some of its flagship projects.

Trojena for example was originally scheduled to host the Asian Winter Games in 2029 but faced delays.

Riyadh hopes private investors will?step up and help cover some of the shortfall. A deal for the Aramco Stadium wouldn't be the first transaction that Saudi-owned sporting assets.

Kingdom Holding Company and the PIF signed a deal in April to acquire a 70% stake each in Saudi Pro League soccer club Al Hilal. As part of a larger privatisation campaign, an American investor acquired the smaller club Al Kholood in 2013.

In May, it was reported that the PIF had been in discussions with investors about a possible minority stake in Newcastle United. This would be part of the fundraising plans to build the stadium.

(source: Reuters)