TLDR:
• PIF sells 2% stake in STC
• $1 billion raised in oversubscribed sale
• PIF’s role in Vision 2030 continues
RIYADH (The Thursday Times) — Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), has sold a 2% stake in Saudi Telecom Company (STC), raising over $1 billion as it reduces its ownership in the telecoms giant. This latest stake reduction brings PIF’s holding in STC down to 62%, reflecting the fund’s ongoing strategy to diversify Saudi Arabia’s economy under the Vision 2030 initiative. The sale was highly sought after, drawing substantial interest from both domestic and international institutional investors, highlighting the continued appeal of STC’s strong market presence in the region.
PIF’s telecoms portfolio
The transaction signals another pivotal move by PIF as it recalibrates its holdings across various sectors. Known for its strong positioning in energy and infrastructure, PIF has also aimed to broaden its portfolio by focusing on telecommunications through its STC holdings. By partially divesting from STC, PIF is raising capital that can be directed into other sectors that align with Saudi Arabia’s Vision 2030, which seeks to reduce reliance on oil revenues and foster a knowledge-based economy. This latest sale follows a prior stake reduction in 2021 when PIF sold 6% of STC, marking a continued strategic approach to asset management.
Oversubscription
The STC share offering, conducted at a price of 38.6 riyals per share, was oversubscribed, reflecting high demand from a diverse group of institutional investors. This overwhelming response underscores the robust investor confidence in STC’s growth prospects and the broader Saudi market. Goldman Sachs Saudi Arabia and SNB Capital, serving as joint coordinators and bookrunners for the sale, structured the offering to tap into both local and international investment pools, thereby diversifying STC’s shareholder base and attracting fresh capital into the company.
Vision 2030
The PIF, managing nearly $1 trillion in assets, has been a driving force behind Saudi Arabia’s Vision 2030 plan. Under the directive to diversify the nation’s economic foundations, PIF has allocated substantial resources into sectors beyond oil, with technology and telecommunications emerging as focal points. The partial divestment in STC aligns with this vision by releasing capital that can be reinvested into other areas, such as tourism, renewable energy, and infrastructure. These initiatives aim to lay a foundation for economic sustainability that extends beyond Saudi Arabia’s traditional reliance on its oil reserves.
