IPO planned for STC

16 November 2001

Saudi Telecommunications Company (STC)is understood to be progressing with plans for its initial public offering (IPO), which is required under the telecommunications act passed in June. The timing of an IPO has been the subject of much speculation, with early indications suggesting it will take place in the first quarter of next year. The value of the company has been estimated at about SR 12,000 million ($3,200 million - MEED 19:10:01).

STC is served by a number of advisers, all of the US, for its privatisation. Consultant Booz Allen & Hamiltonis advising on the company's management restructuring and corporatisation, law firm Baker & McKenzieis the legal adviser, and accountant JP MorganChase & Company is advising on the financial aspects of the process. None of the companies were available to comment on the timing or procedures of the proposed IPO .

A number of outstanding issues must be fully resolved before the IPO can go ahead. The telecommunications law addressed some of these issues with the clarification of asset ownership between STC and the Posts, Telephones & Telegraphs Ministry. It must also be decided which branch of government will hold the estimated 70-80 per cent of shares in the company that will not be sold. It is understood that the flotation will be open to local investors only.

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