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The Public Investment Fund is acquiring a controlling stake in stc-owned Telecoms Towers Company, better known as Tawal, according to two separate statements, here and here. The move still needs approval from stc’s general assembly and regulatory clearance.
This is a related-party transaction: Stc is majority owned by the PIF with a 64% stake. The agreement will also trigger the launch of a completely new entity under which the PIF’s telecoms assets will be consolidated, the statements read.
Becoming the region’s largest telecom infrastructure company: The PIF and stc will work together to consolidate Tawal and Golden Lattice Investment (Glic) under a new entity that is expected to own and manage a portfolio of around 30k towers across five countries. The new entity will have annual revenues in the USD 1.3 bn range, the PIF statement reads.
About Glic: GLIC owns and manages 8k telecom towers across the Kingdom and is majority owned by the PIF. Prince Saud Bin Fahad bin Abdulaziz and Sultan Holding Company hold minority stakes in Glic.
This has been in the works since 2022: A PIF consortium bought a 60% stake in Zain KSA’s Glic back in 2022 for SAR 3 bn, which landed the consortium a 60% majority stake in the telecom towers company. Later that year, The PIF made a non-binding offer to buy a 51% stake in Tawal with a view to combining the two.
How it’s going down: A share swap + cash-settlement: The acquisition of Tawal will be done by means of a share swap where stc along with the minority owners of Glic will get ownership shares in the new entity, while stc will also receive SAR 8.7 bn that it plans to use to finance its “growth and expansion strategy along with maximizing its shareholders’ return.”
Who will own what? The PIF will hold a majority stake of 54%, followed by stc (43%), along with with minority shareholders holding a combined 3%. Stc will also have to inject SAR 533 mn into the new entity for its shareholding amount to settle at 43%, bringing the capital of the new entity at SAR 1.2 bn, according to our calculations.
Talking valuation: Tawal is valued at SAR 22 bn, and Glic is valued at SAR 3 bn — both valuations are excluding the companies’ cashflow and debt obligations.
