Saudi Arabia’s PIF raises $1bn from stc Group stake sale

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Saudi Arabia’s Public Investment Fund (PIF) has raised SAR3.86bn ($1.03bn) from selling a 2 per cent stake in telecoms firm stc Group, the sovereign wealth fund said on Thursday, as it seeks to raise funds for the Gulf country’s economic diversification programme.

The final price for the sale of the 100 million shares was set at SAR38.6 per share, about a 6.1  discount to stc’s closing price of SAR41.1 on Wednesday, according to Reuters’ calculations.

The offering was the largest ever accelerated book-build share sale in Saudi Arabia and the broader Middle East and North Africa (MENA) region, PIF said in a statement, adding the deal was oversubscribed without providing further details.

PIF, which had sold 6 per cent of stc for $3.2bn in 2021, will keep a stake of 62 per cent in the country’s largest telecoms operator after the offering, which was announced late on Wednesday by banks running the deal.

“This transaction is in line with PIF’s strategy to recycle its capital and invest in emerging and promising sectors in the local economy,” it said.

PIF’s remaining stake equates to 3.1 billion shares in the company, or 62% of stc’s issued share
capital. This transaction is in line with PIF’s strategy to recycle its capital and invest in emerging
and promising sectors in the local economy.

— Public Investment Fund (@PIF_en) November 14, 2024

The wealth fund, which has nearly $1tn in assets under management, is the main engine of Prime Minister and Crown Prince Mohammed bin Salman’s strategy to wean the Saudi economy off its dependence on the oil that made it one of the world’s wealthiest nations.

The plan, known as “Vision 2030”, aims to develop new sectors and create more sustainable revenue streams.

However, the world’s top oil exporter has had to rein in some of its ambitions over the past year as low oil prices and production hit an economy still heavily reliant on hydrocarbon revenues.

As part of a review, the kingdom has scaled back lofty ambitions for its NEOM mega-project – a Red Sea urban and industrial development nearly the size of Belgium – to prioritise completing elements essential to hosting global sporting events over the next decade as rising costs weigh, Reuters reported on Wednesday, citing sources.

The report followed the sudden departure of the project’s long-time CEO Nadhmi al-Nasr.

stc’s shares fell as much as 3.9 per cent to SAR39.5 at the start of trading in Riyadh on Thursday. They have risen over 4 per cent since the start of the year.

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