Saudi Wealth Fund Plans to Sell Mega Shares in Telecom Business and Economic News

The Sovereign Wealth Fund will offer a 5 per cent stake in the most profitable mobile phone operator in the Middle East.

Saudi Arabia’s Sovereign Wealth Fund is set to become the world’s second-largest bidder in Europe, the Middle East and Africa as it seeks to finance a major investment program to diversify the oil-dependent economy.

The Public Investment Fund expects to raise $ 3.1 billion through the sale of shares in Saudi Telecom Co., offering a 5% stake in the most profitable mobile phone operator in the Middle East, according to a stock exchange statement.

A total of 100 million shares of STC, as the company is known, will be offered between 100 errials ($ 26.70) and 116 errials starting December 5th. The sale of STC’s stake has been set by Germany’s Siemens Healthineers to exceed its $ 2.8 billion shareholding location. AG in March shows data collected by Bloomberg.

STC shares are offered at a discount of 111.20 riyal from Sunday’s closing price. Shares have risen more than 6% this year compared to a 28% gain in the Tadawul All Share Index. It was almost 4% lower at 11:00 in Riyadh.

The sovereign wealth fund of Saudi Arabia is one of the main vehicles for the plans to diversify the Saudi economy away from oil by Crown Prince Mohammed Bin Salman. It was previously reported that it would invest about $ 40 billion in the home economy by the year 2025.

Not forever

The Crown Prince said earlier this year that the Wealth Fund should not “permanently” sustain all of its investments, as it seeks to reduce stakes and limit the ownership of some companies to a minority. “So if you own 70% of a company, it’s wrong – PIF would own 30% of that company and sell that 40%,” he said at the time.

The fund has borrowed money, sold assets and received revenue from the government while looking for ways to pay for its new investments. PIF says it uses the money from existing investments to fund new deals.

The sale of the shares began as planned in September, when the fund said it had hired a bank group including Goldman Sachs Group Inc., HSBC Holdings Plc and Morgan Stanley to manage the sale of a 70% stake in STC.

Goldman Sachs, HSBC, Morgan Stanley and SNB Capital Citigroup Inc. and are a global financial advisor and coordinator with Credit Suisse Group AG. The Saudi financial institution will also be the CEO.

More from the statement:

• Retail investors will receive about 10 million shares, 10% of the shares offered
• The subscription period for institutional investors will run from 5 December to 9 December
• The retail investor subscription period runs from December 7 to December 8
• Al Rajhi Bank, Riyadh Bank and SNB are acting as recipient banks