Article 14 of the Saudi Privatization Law

This article regulates the privatization project company, the company set up specifically to carry out the project:

1. Requiring incorporation: the executing entity may require the best bidder to set up a project company that is the private party in the contract or subsidiary contract, provided that this is included in the competition documents. It may agree with the bidder on the capital, the partners and the company's other provisions.
2. Government participation: the competent authority may approve any government body, public authority or institution holding shares or a stake in the company, without prejudice to paragraph (2) of Article 16, which provides that a contract is concluded only with a private party and prevents bodies with public legal personality from contracting with the government as a private party.
3. Transferring and pledging shares: any transfer of ownership of the private party's shares or stakes in the company, or pledge of them, is void unless done in accordance with the controls specified in the contract or subsidiary contract, or with the prior approval of the competent authority.
4. Other provisions: the Implementing Regulations set them, without prejudice to the Companies Law.

The reason for voiding the transfer is that the government chose the investor for its qualifications, so it should not be possible for it to leave the project and be replaced by another without oversight. Anyone who wants to sell their stake or pledge it to obtain financing should first review the contract, and consult a lawyer who specializes in commercial and company matters.