Telecoms

STC approves PIF purchase of telecom company

July 26, 2024, 12:36 PM

STC wants to consolidate the mobile tower market

Tawal to become PIF subsidiary
Annual revenues to be $1.3bn
New entity to have 30,000 towers

Shareholders of Saudi telecom giant STC have approved plans to create a new telecommunications infrastructure company in which the Public Investment Fund will have a 51 percent stake valued at SAR8.7 billion ($2.3 billion).

Under the deal, the STC-owned Telecommunication Towers Co. Limited (Tawal) will become a PIF subsidiary through a merger with Golden Lattice Investment Company, which is also owned by the sovereign wealth fund.

The revamped entity is expected to have 30,000 mobile tower sites and estimated annual revenues of $1.3 billion, owning infrastructure assets in Bulgaria, Croatia and Slovenia.

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PIF is already the majority owner of STC, and the telco is seeking more acquisitions in Europe.

STC recently ended talks with French-Israeli tycoon Patrick Drahi to buy Altice Portugal after a disagreement over the price.

PIF is shifting strategy towards more domestic acquisitions. All 22 of its 2023 purchases were local.

A July 24 statement to the Saudi stock exchange, where STC trades publicly, said that in an ordinary general meeting this week Tawal was valued at nearly SAR22 billion, implying an enterprise value of 100 percent on a cash-free and debt-free basis.

The new entity will be 54 percent owned by PIF and 43 percent by STC, with Golden Lattice minority shareholders Prince Saud Bin Fahad bin Abdulaziz and Sultan Holding Company each owning stakes of nearly 1.5 percent.

The merger will be a “stepping-stone to consolidating the Saudi tower market”, STC’s group chief investment officer Motaz Alangari said in April.