STC asks banks to pitch for subsidiary IPO
The IPO size could be around $500 million if the company sells 20 per cent.
Saudi Telecom Co (STC) has asked banks to pitch for roles in a potential public offering of its products and services development arm, three sources familiar with the matter told Reuters.
STC, Saudi Arabia's largest telecoms operator, sent a request for proposals to international and local banks last week for Solutions by STC (STCS), said the sources, who declined to be identified as the matter is not public.
The company did not communicate with banks its planned deal size, they said.
STCS last year had over SR5 billion ($1.33 billion) of revenues and profit in the range of SR500 million, which would be a sizeable offering, they said.
The company's valuation could be around SR9 billion ($2.4 billion), if it garners 18-20 times its earnings multiples, one of the sources said.
The IPO size could be around $500 million if the company sells 20 per cent, the source said.
STC did not respond to a request for immediate comment when contacted by Reuters.
The country has witnessed a flurry of public offerings this year as companies tap into Saudi demand for shares since oil giant Aramco's record IPO last year.
Saudi Arabia is encouraging more companies to list in a bid to deepen its capital markets under reforms aimed at reducing its reliance on oil.
Supermarket retailer BinDawood Holding earlier this week set an indicative price for its initial public offering, seeking to raise as much as SR2.19 billion ($585 million) in a Riyadh listing. - Reuters
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