Saudi Arabia's Public Investment Fund raised 3.86 billion riyals ($1.03 billion) from the sale of a 2% stake in Saudi Telecom Co. (STC), according to a disclosure issued in the early hours of Thursday.
The final offering price was set at SAR 38.6 per share, approximately 6% below the closing price of the company’s shares yesterday. This came after an accelerated book building process led by Goldman Sachs Saudi Arabia and NCB Capital.
Following the planned sale of around 100 million shares today, Thursday, before the market opens, the Saudi sovereign fund will own 62% of the company’s issued capital, and its stake will be subject to a 90-day contractual lock-up period after the deal is completed.
The offering, which was limited to local and foreign institutions, was covered about five times, according to statements by a source familiar with the deal, who added that about 40% of the offering shares were allocated to foreigners.
He pointed out that the deal is the first secondary offering to start and end within 24 hours without a weekend in Saudi Arabia, in accordance with the best international practices in developed markets.
Three years ago, the fund sold a 5% stake in the company, for $3.2 billion.
Earlier this month, stc announced a 5.3% year-on-year decline in its net profits in the third quarter, due to higher operating expenses and the impact of exceptional gains from the sale of land in the previous year. Despite the decline, the group’s profits exceeded analysts’ average expectations by about a third, as estimates indicated profits of 3.5 billion riyals, while stc recorded a net profit of 4.64 billion riyals during the period from July to September.
