Privatization processes are one of the most critical and political processes within any economy historically dependent on the public sector. Transformation of large enterprises from public to the private needs cumulative knowledge of the vast previous human experience combined with intuitive comprehension of the local political, economical, and priorities within the concerned country.

AlShall possesses this understanding and imparts it through professional teams. This work is initiated from a conceptual and project framework, to a fully developed privatization scheme containing industry structure, regulatory framework, identification of asset transfer mechanisms, including preparation of private and public placement documents, as well as supervisions of transaction implementation.

AlShall has acted as a prime advisor in a large number of projects within industries such as oil, recreational, retail, ports operations, and others. Moreover, it has acted as a financial advisor in numerous BOT projects which, to date, formed the core of the privatization effort within Kuwait. ِAlShall was the advisory arm for many investors in their BOT submission to the municipal authorities, noting that these investor teams won their bids by a considerable success ratio (70%). It is expected that such activities will flourish in the region with attempts of economic reforms.

Privatization Experience List

PROJECT NAME COUNTRY SECTOR SERVICES PERFORMED COMPLETION DATE
Privatization of printing press Kuwait Government – Privatization Valuation for privatization of a government services concern 2007
Privatization of fuel stations and blending plant Kuwait Industrial – Services Lead advisor to fuel stations and oil blending plant privatization committee. Valued operations and set up an implementable privatization process. 2002
Privatization local marketing operations of a Petroleum company Kuwait Government – Privatization – Oil & Gas Lead advisor for privatization of local marketing operations of and oil and gas concern. Valued operations and presented to privatization committee 2002
Privatization of marine operations of Shuaiba Port Kuwait Government – Privatization Feasibility privatization Study – Shuiaba port 2000
Privatization of stevedoring operations of Shuwaikh port Kuwait Government – Privatization Feasibility privatization study – Shuwaikh port 2000
Privatization of Doha port Kuwait Government – Privatization Feasibility privatization study – Doha port 2000

Privatization Examples

Privatization examples

Project Example – Privatization

Assignment Privatization of local marketing operations of KNPC (fuel stations and oil blending plant).
Client Name Privatization Committee led by Kuwait Investment Authority with Kuwait Petroleum Company.
Client’s Activities Governmental – Public Sector.
Assignment Date & Duration 2002, 15 months
Main Area of Focus
  • Review of old studies and data gathering
  • Prepare RFPS and qualification criteria to assign specialized third party consultants
  • Select sub-contractors
  • Develop privatization strategy that included:
    – Pricing strategy (gross margin)
    – National labor force
    – Number of companies
    – Ownership structure of these companies
    – Basis of allocation of the fuel stations to these companies
    – Regulatory supervision requirements upon privatization
    – Valuation of companies
Services Provided
  • Held role of lead advisor to the committee for fuel stations and oil blending plant privatization.
  • Valued operations
  • Set-up an implementable privatization process
  • Presented findings to Privatization Committee and Higher Oil Council
Outcome The fuel stations and oil blending plant were subsequently privatized in line with AlShall’s recommendations.

 

Project Example – Feasibility Study

Assignment Establishing an Islamic Bank – Cham Bank, Damascus, Syria
Client Name Kuwaiti Real Estate Holding (formerly known as Kuwait National Real Estate Services Company).
Client’s Activities Private sector company with real estate activities in Kuwait and the MENA region.
Project Size USD 175,000,000 (KD 50,000,000)
Assignment Date & Duration 2004, 5 months.
Main Area of Focus Carrying out a financial feasibility, developing economic and market studies, and making a final submission of the BOT proposal to the Municipality of Kuwait.
Services Provided Conducted a comprehensive feasibility study including all sub-components such as market research, industry trends, supply and demand quantification, competitors, customers, legal framework, identification and quantification of revenue streams, operating expenses, capital expenditures, capital structure, required rates of return and associated risks. AlShall built financial models for each entity to incorporate all these elements in pro-forma income statements, balance sheets and cash flows, supported by appropriate scenarios and sensitivity analysis.
Outcome Consultancy mandate fully executed and BOT competition won by the client.