(Bloomberg) -- Saudi Arabia’s sovereign wealth fund agreed to buy a majority stake in Saudi Telecom Co.’s tower unit for 8.7 billion riyals ($2.3 billion) and plans to merge it with other local assets to create a new mobile tower giant. 

The Public Investment Fund will own 54% of the new venture while STC, as Saudi Telecom is known, will hold 43%, according to a filing on the Saudi stock exchange. The entity will combine towers unit Tawal with Golden Lattice Investment Co., which the PIF bought from Zain Saudi last year, and manage a portfolio of about 30,000 towers across five countries.

The PIF has considered similar moves in the past to create a new cellular towers company, with the goal of potentially listing it on the local stock exchange, Bloomberg has reported. The sovereign wealth fund is looking at lining up equity offerings in its portfolio companies as it hunts for new sources of cash to help pay for Crown Prince Mohammed bin Salman’s economic transformation, known as Vision 2030. 

STC, which is majority owned by the PIF, will inject about 533 million riyals in the new entity’s capital to maintain ownership and will use proceeds from the sale of its towers unit Tawal to support expansion locally and abroad. STC spun out its more than 15,000 towers into Tawal in 2019.

Tawal was valued at 21.94 billion riyals and GLIC had an enterprise value of 3 billion riyals. 

Prince Saud Bin Fahad bin Abdulaziz and Sultan Holding Co. will each hold 1.48% of the new towers entity. 

The transactions are expected to be completed in the second half of the year.

 

©2024 Bloomberg L.P.