(Bloomberg) — Saudi Arabia’s wealth fund sold part of its stake in the kingdom’s main mobile-phone operator for about $1 billion, the latest step in its efforts to raise cash for the government’s economic transformation plan.
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The Public Investment Fund sold 100 million shares in Saudi Telecom Co., or a 2% stake, at 38.6 ($10.27) riyals apiece. That’s a 6% discount to the stock’s Wednesday closing price of 41.1 riyals.
The PIF is the main entity tasked with driving Saudi Arabia’s Vision 2030 program, which aims to diversify the oil-dependent economy. It’s been looking to sell down holdings in portfolio companies to raise cash, Bloomberg News has reported.
The STC deal came shortly after the PIF further trimmed its stake in Nintendo Co., on the back of a selldown in the Japanese firm that began in August. Over the past year, the fund has also regularly tapped bond markets.
Saudi Arabia’s need for funding is becoming ever more acute against the backdrop of weak oil prices that have pushed the budget into a deficit, and officials are re-prioritizing projects. Earlier this year, the government sold a sliver of its holdings in oil major Aramco for about $12.4 billion.
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Apart from Saudi Telecom, the wealth fund has investments in companies across a range of industries from Saudi Electricity and utility Acwa Power to bourse operator Saudi Tadawul Group Holding. It also owns majority stake in the $52 billion commodities firm Saudi Arabian Mining as well as holdings in lenders including Saudi National Bank, Riyad Bank and Alinma.
Secondary offerings are rare in the region. The PIF has previously sold part of its stake in the kingdom’s stock exchange and raised $3.2 billion by offloading part of its stake in Saudi Telecom in 2021. In the months prior to that sale, Crown Prince Mohammed bin Salman said the fund shouldn’t hold investments in local firms “forever.”
The PIF will remain the firm’s largest shareholder post the sale, with a 62% holding. Goldman Sachs Group Inc. and SNB Capital are joint global coordinators and bookrunners on the share sale.
(Updates with details on pricing, details on Nintedo)