Kuwait Wealth Fund to Sell $5.4 Billion of Company Stakes

Kuwait Investment Authority, the sovereign wealth fund which started as a Bank of England account dedicated to receiving oil money, will sell stakes in three local companies worth 1.56 billion dinars ($5.4 billion).

The KIA, as the fund is known, will sell its Kuwait Investment Co. holding in a public offering in the first half of next year, according to a statement on the website of the official KUNA news agency. Kuwait Finance House and Mobile Telecommunications Co. shares will also be sold.

The fund is focusing on infrastructure investments in the U.S. and Europe and doesn’t expect to increase its equity holdings this year, Bader Al Saad, managing director of the KIA, said in an interview with Al Arabiya TV earlier this year. The KIA is targeting about $5 billion in such infrastructure assets, mostly in the U.K., within the next three years to five years, the Financial Times reported last year.

Proceeds from the sales will be reinvested, the KIA said. The KIA owns 24 percent of Kuwait Finance House, 24.6 percent of Zain, and 76 percent of Kuwait Investment Co., according to data compiled by Bloomberg. The fund has $410 billion of assets, according to the Sovereign Wealth Fund Institute.

Trading Canceled

Trading in Kuwait Investment Co. and Zain was canceled and will resume on Oct. 26., the stock exchange said. Kuwait Finance House, suspended this morning, rose 5.1 percent to 820 Kuwaiti fils at 12:13 p.m. in Kuwait City.

Zain operates mobile phone networks across the Middle East including Saudi Arabia, Iraq and Lebanon. Last month, it sold shares in its Bahrain subsidiary on the country’s stock exchange. Kuwait Finance House is the country’s oldest Islamic bank, and Kuwait Investment Co. is a fund manager.

The wealth fund was established in London on Feb. 23, 1953 when Sheikh Abdullah Al-Salem Al-Sabah decided that oil could be used to create a savings fund for the future, according to the sovereign wealth fund institute. It has invested more than 15 billion pounds ($24 billion) in more than 100 listed U.K. equities, according to the institute.

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