RIYADH, 19 November 2002 — Saudi Telecom Company will float 30 percent of its shares for public subscription on Dec. 17 at the rate of SR170 per share, Finance and National Economy Minister Dr. Ibrahim Al-Assaf announced yesterday.
The minister estimated the number of shares for sale at 90 million out of which 30 million will be allocated equally for the Pension Fund and the General Organization for Social Insurance (GOSI).
“Agreement has been reached with all national banks in the Kingdom to receive applications for subscription,” Saudi Press Agency quoted Al-Assaf as saying. “The shares, with a nominal value of SR50, will be sold at the rate of SR170 to subscribers,” he announced.
The largest release of shares since 1984, the floatation will fetch between SR11 billion and SR15 billion to the public treasury, a banking source said.
Al-Assaf, who is also a member of the Supreme Economic Council, said in a previous statement that the state would divert the sale proceeds to pay part of its public debt estimated at SR675 billion ($180 billion).
STC was separated from the Ministry of Posts, Telegraphs and Telephones and founded as an independent company in 1998 with a capital of SR12 billion.
Sale of STC shares will be restricted to Saudis, Al-Assaf said. “Companies, establishments, funds, banks, societies and others will not be allowed to take part in the first floatation,” he added. The floatation will start on Dec. 17 and end at 6 p.m. on Jan. 6, 2003.
Al-Assaf’s announcement comes after STC made a profit of SR2.8 billion in the past nine months. According to a company statement, its third quarter revenues amounted to SR17.4 billion, 17 percent more than last year.
Saudi economists said the revenue from the sale of government shares in a number of companies, including big enterprises, listed on the Saudi share market could fetch SR187.5 billion.
Saudi Arabia has negotiated with the Bahrain-based Gulf International Bank to undertake the STC share floatation. A GIB official said the shares will be the largest public offering since 1984 when 30 percent of Saudi Arabian Basic Industries Corporation shares was floated.
Al-Assaf said every subscriber has to fill a specific form, which can be obtained from banks. “If a subscriber wants to buy shares for his family members, he has to fill a separate form,” he added.
All shares subscribed will be in the name of the main male or female subscriber of the family.
The application form must be attached with the original and a copy of the civil ID card or family record. The originals will be returned to the applicant after verification.
Al-Assaf said people can use power of attorneys of up to 10 persons to purchase shares.
Change of ownership of shares will be allowed only after privatization, he added. Payment can be made either in cash or requesting deduction from bank accounts or giving checks.
When more shares are floated for subscription, 10 shares will be given to each main subscriber and every member of his family. Distribution of the remaining shares among the subscribers will depend on the volume of their subscription.
Al-Assaf said the Public Investment Fund, authorized to oversee the floatation, will have the right to reject any application not fulfilling the conditions. Applications should be stamped by the bank.
