The government has given the go-ahead for the sale of a 30 per cent stake in state-owned Saudi Telecom, the official Saudi Press Agency announced on 9 September. The kingdom stands to make some $3,260 million from the offering, making it the largest sale of state assets since the partial privatisation of Saudi Basic Industries Corporation (Sabic)in the 1980s.
Under a plan drawn up by the Supreme Economic Council, an initial public offering (IPO) of 72 million shares will be made at some point in the last three months of the year. Two-thirds of the shares will be offered to Saudi citizens and the remainder will be bought by two state-run pension funds. The share offering will remain open for 21 days, and will be managed by the Public Investment Fund. The price of each share has been set at SR 170 ($45).
The announcement follows hard on the heels of the issue of new telecoms by-laws by the Saudi Communications Commission (SCC) in July. The publication of the laws removed one of the last obstacles to deregulation of the sector. SCC is now preparing to tender new licences to operate telecoms networks in the kingdom. The largest of these is for a GSM network, which is expected to be launched in 2004 (MEED 23:8:02).
The IPO is the first major commitment to a long-awaited privatisation programme. Plans to privatise Saudi Arabian Airlineswere first floated in 1999, and the government is now mulling over a series of reports produced by BNP Paribas on the restructuring of the Saudi aviation sector (MEED 28:6:02).