Saudi Arabia-backed developer seeks World Cup stadium investors, sources say

Saudi Arabia's ROSHN Group is seeking investors for its Aramco Stadium, a 2034 FIFA World Cup venue, three sources told Reuters, as the state-backed developer looks to free up capital to deliver projects for the kingdom's economic transformation strategy.

As the Saudi government works to plug a widening budget deficit, public entities are increasingly tapping outside capital to help fund the logistics, tourism and sports projects meant to cut the economy's reliance on oil and ‌gas revenue.

ROSHN, which is ⁠owned ⁠by $1.2 trillion sovereign wealth fund PIF, has hired JPMorgan to run the equity fundraising process, said two of the sources, who asked not to be named because the matter is not public.


The ​third source said PIF and ROSHN have been testing private investor appetite for the stadium.

Aramco and JPMorgan declined to comment, while ROSHN and PIF did not ​reply to requests for comment.

STADIUM TRANSACTION WOULD MIRROR STRUCTURE OF PIPELINE DEALS

The Aramco Stadium is set to be completed by the end of this year and host its first game in January.

Saudi Aramco, the state oil giant, operates the stadium under a 25-year concession, with ROSHN as owner ​and developer of the project.

The transaction being pursued by ROSHN is expected to follow a lease ⁠and leaseback ‌structure, the sources said.

Similar infrastructure fundraising deals used by Aramco for its oil and gas pipeline assets have attracted ​investors including EIG Global Energy ​Partners and Global Infrastructure Partners, part of BlackRock.

Under the model, ROSHN would establish a vehicle to control the leasehold ⁠that it would co-own with the investors, who would provide funds up front.

The transaction would ​inject fresh funding from investors into the project, while freeing up capital for ROSHN to deploy its ​funds elsewhere. The investors, in turn, would receive a long-term income stream in the form of a share of the lease payments from Aramco.

SAUDI ARABIA STRUGGLING TO DELIVER FLAGSHIP PROJECTS

Under the Vision 2030 economic overhaul plan, PIF has invested heavily in sports, including in Formula E, boxing, tennis, e-sports as well as soccer.

The 2034 World Cup is a marquee event for the kingdom and a top priority for its economic transformation plan.

Riyadh is working to build or renovate 15 stadiums across five cities for the tournament, including the 47,000-seat Aramco Stadium in the eastern city of Al Khobar, ‌as well as 132 training venues.

The 2034 competition will mark the first time a single nation hosts the expanded 48-team format, which Saudi Arabia's Sports Minister Prince Abdulaziz bin Turki AlFaisal said this week presented unique challenges.

But overspending and lower-than-anticipated ​global oil prices that have ​throttled state revenues have left Saudi ⁠Arabia struggling to deliver some of its flagship projects.

Trojena, for example, a showpiece mountain resort part of the NEOM desert mega city, was originally set to host the 2029 Asian Winter Games but has faced delays.

Riyadh is now hoping private investors can step in and help take up some ​of the shortfall, and a deal for the Aramco Stadium would not be the first transaction involving Saudi-owned sports assets.

Kingdom Holding Company signed an agreement in April to acquire a 70% stake in Saudi Pro League soccer club Al Hilal from the PIF. An American investor took over smaller club Al Kholood last year as part of a wider privatisation drive.

Reuters reported in May that the PIF was in talks with investors over them taking a minority stake in Newcastle United as part of its fundraising plans for the club's stadium.