ASMA Capital Partners B.S.C (c)

Saudi Privatisation Summit 2017 What Saudi Arabia can learn from the international experience with privatisation?

Stephen Vineburg Chief Executive Officer Date: 22ndFebruary 2017

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ASMA Capital is an asset management firm licensed and regulated by the Central Bank of Bahrain.

ASMA Capital is the manager of the IDB Infrastructure Fund II (“IDB Fund II”).

The shareholders of ASMA Capital are also the investors in the Fund:

ASMA CAPITAL MANAGES THE IDB INFRASTRUCTURE FUND II

BACKED BY SOVEREIGN INSTITUTIONS

Islamic Development Bank (“IDB”) Kingdom of Saudi Arabia

Public Pension Agency (“PPA”) Kingdom of Saudi Arabia

Public Investment Fund (“PIF”) Kingdom of Saudi Arabia

Ministry of Finance Kingdom of Bahrain

Ministry of Finance Sultanate of Brunei Darussalam

ASMA Capital Partners B.S.C. (c)

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Privatisation: International Experience

Privatisation can have multiple objectives

Privatisation can take many forms

Privatisation has been a political issue

International investors will support well constructed privatisation program

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Lessons from International Experience

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An International Privatisation Partnership Model

100% Government Owned

Government Entity

Form Partnership

Full Government control

Scope for operational improvements

Demand for capital expenditure

Government retains majority shareholding

Investors provide “road map” for transition

Government Entity

Institutional Partner

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An International Privatisation Partnership Model: Case Study

Bpost partnered with CVC Capital Partners and Danish

Post

Bpost sold 50%-1 share

100% Government Owned Form Partnership

Full Government control

Scope for operational improvements

Demand for capital expenditure

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An International Privatisation Partnership Model: Case Study

CVC and Danish Post brought financial and operational expertise

Increased profits Value of Bpost increased 4.7x, from EUR0.3bn to EUR1.4bn

in 8 years

Bpost retained control

Increased parcel volumes, customer and employee

satisfaction

Successful IPO on Belgian Stock Exchange

Government achieved value and retained ownership

Partnership has improved financial and operations

Transition Period Value Realisation

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Example for Saudi Arabian Privatisation Partnership Model

Government to get initial sale proceeds

Government retains control

Investor to provide “road map”

for transition

Government and Institutional Partner to work together on:

Operational improvements

Capital structure Improved financial

management Strategy implementation

• Further value creation upon listing

• Increase size and depth of stock market

• Increase local population shareholding base

• Government can retain percentage of ownership and continue to earn stable income

• Government has option to get full sale proceeds

• Government meets objective of value enhancement

Government has full control

Scope for operational improvements

Demand for capital

expenditure

100% Government Owned Form Partnership Transition period Value Realisation

Partnership to achieve value uplift during transition period

Saudi Arabian Government

Entity

Institutional Partner

Saudi Arabian Government

Entity

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Conclusions

International experience highlights the importance of:

Identifying primary objectives of privatisation

Choosing the most effective model of privatisation

Choosing the right partner

Supportive legislative and regulatory framework

Suite 1001, GB Corp Tower, Bahrain Financial Harbour, PO Box 60340, Kingdom of Bahrain

T. +973 1710 2400 F. +973 1721 5180 E. info@asmacapital.com

Stephen Vineburg

Email: Stephen.Vineburg@asmacapital.com Tel: +973 1710 2405

Chief Executive Officer