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Saudi budget airline Flynas picks Morgan Stanley as pushes ahead with IPO, say sources: Reuters

Saudi budget airline Flynas, part owned by Saudi billionaire Prince Alwaleed Bin Talal’s firm, is pressing ahead with an initial public offering and has selected Morgan Stanley (MS.N) to work on it, sources familiar with the matter told Reuters on Thursday.

Flynas is proceeding with its plan to sell existing shares to the public that may include part of Prince Alwaleed’s Kingdom Holding’s 4280.SE 34 percent stake, people familiar with the matter said. That is despite the detention of Alwaleed in an investigation by a new Saudi anti-corruption body.

Saudi Arabian IPOs typically involve the sale of around 30 percent of a business.

The central bank has sought to reassure the business community this week that the investigation would not hurt the economy, saying companies and banks owned by detained persons could operate as normal.

Kingdom Holding, whose shares have lost around a fifth of their value over the past week, was not available to comment.

It made a statement earlier this week, citing chief executive, Talal Ibrahim al-Maiman, that it has received the support of the government, and would continue to operate “business as usual”.

Investment banks pitched for the role two weeks ago, and the decision came this week, according to two sources, declining to be named as the matter was not public.

NCB Capital, the investment arm of National Commercial Bank 1180.SE, the kingdom’s largest lender, will be working with Morgan Stanley, one of the sources said.

Flynas spokesman Bander al-Hassan told Reuters that the airline was yet to made a decision on who would advise on the IPO, while Morgan Stanley declined to comment.

Flynas was previously working with Banque Saudi Fransi 1050.SE for its public share sale, said the sources, but they faced a conflict of interest after Kingdom Holding agreed to buy a 16.2 percent stake in the Saudi bank for $1.5 billion in September.

In January, flynas ordered 60 Airbus A320neos and converted a past order for 20 older versions of the A320 to the neo model. The 80 jets are likely to give flynas one of the largest budget airline fleets in the Middle East.

Flynas, which launched as Nas Air in 2007 and first turned a profit in 2015, is facing increasing competition in Saudi Arabia, its primary market. State-owned Saudi Arabian Airlines launched a budget airline, flyadeal, in September.