aljazeera.com
Economy|Business and Economy
Saudi wealth fund plans mega share sale in telecom firm
The sovereign wealth fund will offer a 5 percent stake in the Middle East’s most profitable mobile-phone operator.
Saudi Arabia has said it wants to diversify the economy away from oil [File: Angel Garcia/Bloomberg]
By Matthew Martin and Reema AlothmanBloomberg
6 Dec 2021
Saudi Arabia’s sovereign wealth fund is set for what could be the biggest secondary offering of the year in Europe, the Middle East and Africa as it looks to fund a huge investment program to diversify the oil-dependent economy.
The Public Investment Fund plans to raise as much as $3.1 billion through the sale of shares in Saudi Telecom Co., offering a 5% stake in the Middle East’s most profitable mobile-phone operator, according to a statement to the stock exchange.
A total of 100 million shares in STC, as the company is known, will be offered at between 100 riyals ($26.70) to 116 riyals starting Dec. 5. The STC stake sale is set to eclipse the $2.8 billion share placement by Germany’s Siemens Healthineers AG in March, data compiled by Bloomberg show.
STC’s shares are offered at a discount to Sunday’s closing price of 116.20 riyals. The stock has climbed over 6% this year, compared with the 28% gain in the Tadawul All Share Index. It traded almost 4% lower at 11 a.m. in Riyadh.
Saudi Arabia’s sovereign wealth fund is one of the main vehicles for Crown Prince Mohammed Bin Salman’s plans to diversify the Saudi economy away from oil. It’s previously said it would invest about $40 billion in the domestic economy a year until 2025.
Not Forever
The crown prince said earlier this year that the wealth fund shouldn’t hold on to all of its investments “forever,” as he looks to pare down holdings and limit the ownership in some companies to a minority stake. “So if you own 70% of a company then that’s wrong — PIF would own 30% of that company and they will sell that 40%,” he said at the time.
The fund has borrowed money, sold off assets and received cash infusions from the government as it looks for ways to pay for its new investments. The PIF also says it uses money generated from existing investments to fund new deals.
The share sale was planned as early as September when the fund said it had hired a group of banks including Goldman Sachs Group Inc., HSBC Holdings Plc and Morgan Stanley to manage the sale of part of its 70% stake in STC.
Goldman Sachs, HSBC, Morgan Stanley and SNB Capital are the joint financial advisers and global coordinators with Citigroup Inc. and Credit Suisse Group AG. The Saudi financial institution will also be the lead manager.
More from the statement:
SOURCE: BLOOMBERG
RELATED
Sau­di Ara­bia to set up in­vest­ment fund for car­bon cap­ture
Cli­mate change is an eco­nom­ic op­por­tu­ni­ty, Crown Prince Mo­hammed bin Salman said on Mon­day.
25 Oct 2021
Sau­di Ara­bia’s ri­val­ry with Dubai for re­gion­al HQs heats up
Sau­di of­fi­cials are talk­ing to 7,000 firms around the world about open­ing re­gion­al head­quar­ters in the king­dom.
27 Oct 2021
Is Sau­di Ara­bia’s wealth fund tip­ping to­wards Chi­na?
PIF may be eye­ing ex­pand­ing its hold­ings be­yond the US and Eu­rope to add Chi­nese firms to its list.
4 Nov 2021
Sau­di Ara­bia’s econ­o­my grows at fastest rate in near­ly a decade
High­er oil prices helped the king­dom’s econ­o­my grow at its fastest pace in near­ly a decade in Q3.
9 Nov 2021
MORE FROM ECONOMY
Airbus cancels $6bn contract with Qatar Airways after paint fight
US in talks with Qatar over supplying LNG to EU: Reports
‘Catastrophe’: Peru oil spill clean-up to take weeks
US suspends flights by China carriers after Beijing COVID move
MOST READ
US military aid arrives in Ukraine amid Russia border tensions
Pfizer, Moderna boosters up to 90% effective against Omicron: CDC
Syria: Deadly fighting rages on between ISIL, Kurdish forces
‘I wanted to die’: Abused migrant women in Lebanon face detention
Follow Al Jazeera English:
© 2022 Al Jazeera Media Network
You rely on Al Jazeera for truth and transparency
We understand that your online privacy is very important and consenting to our collection of some personal information takes great trust. We ask for this consent because it allows Al Jazeera to provide an experience that truly gives a voice to the voiceless. You have the option to decline the cookies we automatically place on your browser but allowing Al Jazeera and our trusted partners to use cookies or similar technologies helps us improve our content and offerings to you. You can change your privacy preferences at any time by selecting ‘Cookie preferences’ at the bottom of your screen.To learn more, please view our Cookie Policy.