The recently announced Saudi Arabia South Africa Holding (SASAH) will potentially create business opportunities for both countries and may support the continuing Saudi efforts to diversify the economy by opening yet another gate to join the leading emerging economies known as BRICS.
BRICS is a five-member economic of Brazil, Russia, India, China and South Africa.
The strategic partnership, which was announced by the South Africa Saudi Arabia Business Council on June 11, was initially launched as a joint venture company during the Fourth Saudi Arabian South African Joint Committee held in Riyadh in April and attended by Saudi Minister of Commerce and Industry Tawfiq Al-Rabiah and his counterpart South African Rob Davies.
“The establishment of a new joint holding company, Saudi Arabia South Africa Holding (SASAH), will potentially create business opportunities worth $ 2.5 billion,” Davies said. The minister also viewed this development in-line with South Africa’s strategy of seeking out new sources of investment and trade with dynamic economies — as trade and investment with most of South Africa’s traditional partners are either “declining or stagnant.”
Also, the co-chairman of the Saudi Arabia South Africa Business Council, Iqbal Surve, said at a media briefing in Cape Town that SASAH was a special purpose vehicle “SPV” to enhance business activities between the two consortiums from both countries and to improve and enhance the business relationships between Saudi Arabia and South Africa.
As stated by Surve, SASAH will be made up of different business sectors, including real estate, health services, agriculture, trading, technical services, automotive industries, mining and minerals, construction, power construction, petrochemicals downstream and engineering and will be a legally registered entity in their respective countries and achieve the legal requirements of investment authorities and tax regimes of both countries.
SASAH is also designed to help the two countries to invest in profitable business ventures aiming to create mutual business opportunities in “mining, petrochemicals and agriculture.”
The company will also be entitled for free, 5 percent equity in any joint venture initiated and promoted through it. The holding company would also have the opportunity of taking equity and will have the first right of refusal up to 20 percent equity in any joint venture.
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