Mobile telecommunications company Saudi Arabia (Zain KSA) has completed the sale of its tower assets to the Public Investment Fund (PIF), the kingdom’s sovereign fund for SAR 3.02 billion ($803.5 million).
An agreement was reached last year for the sale of 8,069 tower assets to a PIF-led consortium, the Golden Lattice Investment Company.
In a statement on Monday, Zain KSA said the stake sale has just been completed. It has so far transferred at least 3,000 out of the 8,089 tower assets.
“The ownership of the remaining towers will be transferred in batches in a period not exceeding 18 months,” Zain KSA told the Saudi Stock Exchange (Tadawul), where its shares are traded.
The sale of assets was meant to reduce the company’s dependence on capital expenditures and boost Zain KSA’s financial position.
As part of the deal, Zain KSA will receive SAR 2.4 billion from the asset sale and own 20% stake in GLIC. PIF’s ownership in GLIC accounts for 60%, while the remaining shares go to Saudi Prince Saudi bin Fahd bin Abdulaziz (10%) and Sultan Holding Company (10%).
“The reasons [for the transaction] are to maximise the benefit for its shareholders through reducing the company’s dependence on capital expenditures and separate the ownership, operation and maintenance of the towers, which will lead to strengthening the financial position of Zain KSA, focusing on investing in adjacent markets and creating value to Zain’s customers,” the disclosure said.
The company expects to generate a net profit of up to SAR1.1 billion from the transaction.
“Zain KSA will use the proceeds of the assets sale to maximise the benefit for its shareholders through a combination of debt reduction and the funding of its investment and its core business,” it added. Zawya