PIF to sell further stake in stc in potential $1.1bn deal

Saudi Arabia’s sovereign wealth fund PIF has hired Goldman Sachs and Saudi National Bank to sell around a 2 per cent stake in the country’s telecoms giant stc Group in a deal that could raise as much as $1.1bn, according to a statement from the banks.

The banks said the price of the shares would be determined through an accelerated book-building process. PIF did not immediately respond to a request for comment.

PIF, which sold 6 per cent of stc for $3.2bn in 2021, will keep a 62 per cent stake in the telecoms group after the offering, whose final results will be announced on Thursday. stc will not receive any proceeds, the banks added.

The wealth fund, which has nearly $1tn in assets under management, has been among the most active debt issuers in the GCC region in 2024 to raise funds as Saudi Arabia pushes ahead with its economic transformation plan.

The economic blueprint, known as “Vision 2030”, aims to wean the economy away from oil with investments to develop new sectors and create more sustainable revenue streams.

However, amid lower oil prices and production that have hit the government’s earnings, the kingdom has begun a spending review under which some projects will be delayed or scaled back and others prioritised.

The PIF’s governor said last month that the wealth fund was planning to cut its overseas investments by about a third. It has cut its stake in Japan’s Nintendo to 6.3 per cent from 7.5 per cent, according to a regulatory filing on Wednesday.

stc Group’s shares have risen 4.45 per cent year to date and closed down 0.4 per cent to SAR41.1 ($10.94) apiece on Wednesday.

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