Alwaleed's Kingdom Holding Plans to Pay First Annual Dividend During 2011

Kingdom Holding Co., the investment company owned by Saudi billionaire Prince Alwaleed bin Talal, plans to pay its first annual cash dividend since listing on the Saudi stock exchange more than three years ago.

The company board recommended paying 137.5 million riyals ($36.7 million), or 0.125 riyal a share, from retained earnings during each quarter in 2011, the Riyadh-based company said in a statement on the Saudi bourse website today. Final approval for the 0.5 riyal annual dividend is required by authorities, the company said.

Kingdom Holding, which sold shares in 2007, replaced some of its management and changed businesses to drive growth because of the global financial crisis. In January, Alwaleed transferred 180 million of his shares in Citigroup Inc. to Kingdom Holding to enable the Saudi company to pay dividends and improve earnings, according to a company statement.

Alwaleed, who owns 95 percent of Kingdom Holding, gave up his “full entitlement” to the annual dividend to enable the distribution to shareholders, according to the company’s statement. Alwaleed sold 315 million shares of Kingdom Holding at 10.25 riyals each in an initial public offering in July 2007.

Results

The annual dividend “reflects a move in the company’s strategy to start distributing cash back to its shareholders,” the company said in a separate e-mailed statement. “The company continues to experience improving results on the path of continuous profitability through its sound strategic plan.”

Kingdom Holding lowered its share capital by 41 percent to 37.1 billion riyals in February and appointed Sarmad Zok, chief executive officer of the lodging unit Kingdom Hotel Investments, to the board of Kingdom Holding and its investment committee in June.

Kingdom Holding reported an increase in net income each quarter this year, according to Bloomberg data. The company posted a 31 billion-riyal loss in the fourth quarter of 2008 after Citigroup shares plunged during the credit crisis.

Kingdom also has stakes in Apple Inc., News Corp. and PepsiCo Inc., according to the company’s website. Alwaleed, 55, ranks 19th on Forbes magazine’s list of the world’s richest billionaires, with an estimated net worth of $19.4 billion as of March 10.

The shares increased as much as 5.8 percent, the most since Sept. 1 in Riyadh trading. The share rose 5.1 percent to 8.2 riyals as of 12:30 p.m.

To contact the reporter on this story: Mourad Haroutunian in Riyadh at +966-1-211-8033 or mharoutunian@bloomberg.net; Glen Carey at +966-1-211-8155 or gcarey8@bloomberg.net

To contact the editor responsible for this story: Shaji Mathew at +971-4-364-1028 or shajimathew@bloomberg.net

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