LONDON—The Saudi Telecommunications Company (STC) announced it is planning a domestic initial public offering (IPO) early next year. Indications are that it will involve around 10 percent of the company.
The long-awaited sale will be aimed at Saudi investors and follows a new telecommunications law passed earlier this year. The IPO is expected to take place during a six-month timeframe. Pricing is still under review, but some industry sources reveal that the company is expected to be valued at around US$2.7 billion to US$4 billion.
STC was set up in 1998 to prepare the former PTT for privatization, transferring assets held by a ministry that ran the telecommunications sector. It is not clear whether citizens from other states in the six-member Gulf Cooperation Council will be able to participate in the IPO. Under current laws, GCC nationals can own shares in most Saudi companies with the exception of banks.
The government is in the process of selecting a financial adviser for the IPO. STC is not expected to seek a foreign strategic partner after a tie-up bid it was negotiating with SBC Communications collapsed last year. The deal would have given SBC between 20 percent and 40 percent of STC.
