Saudi Arabia’s sovereign wealth fund (SWF), the Public Investment Fund (PIF) is considering selling part of its 70% stake in Saudi Telecom Co (STC) while retaining majority ownership, the state fund said a report in Reuters.
STC is listed and is the kingdom’s largest telecoms operator and also owns subsidiaries and has stakes in companies operating in Kuwait, Bahrain, the United Arab Emirates, and Turkey.
According to a report in Bloomberg, the PIF would retain more than 50% of the company. That would give it the potential to raise to $12.9 billion based on STC’s current market price.
The planned transaction will target international and local institutional investors, as well as retail investors, according to the $430 billion SWF.
“The potential transaction is expected to contribute to PIF’s establishment and development of new sectors, in addition to strengthening the Saudi economy’s growth and diversifying its sources of income,” PIF said in a statement.
The divestment will contribute to the “medium and long-term value” for all of STC’s investors by diversifying the company’s investor base and “increasing its free float and weight in relevant international indices".
The Public Investment Fund has hired Goldman Sachs Group Inc., Morgan Stanley, HSBC Holdings Plc, and Saudi National Bank’s investment banking arm to “evaluate the potential transaction options” for part of its holding in Saudi Telecom Co., the fund said in a statement Thursday. The sale is intended to help “enable the recycling of PIF’s capital to new investments,” it said.