Zain KSA sells tower infrastructure to GLIC for SAR 3 bln, expects SAR 1.1 bln profit

Logo of Zain KSA

Mobile Telecommunication Co. Saudi Arabia (Zain KSA) completed the sale of stakes in its tower infrastructure to Golden Lattice Investment Co. (GLIC) for SAR 3.02 billion.

In a statement to Tadawul, the telecom services provider said it complied with the transfer of at least 3,000 towers out of the 8,069.

The ownership of the remaining towers will be transferred in batches over a period not exceeding 18 months, it added.

GLIC is 60%-owned by the Public Investment Fund (PIF), 20% by Zain KSA, 10% by Prince Saud bin Fahd, and 10% by Sultan Holding Co.

Zain KSA will sell the physical towers infrastructure and retain ownership of all other equipment, such as wireless communication antennas, software, technology, and intellectual property, the statement noted.

The asset book value is SAR 1.6 billion, Zain KSA said, adding that the net value of the deal assets was SAR 1.4 billion in 2022, SAR 1.3 billion in 2021, and SAR 1.5 billion 2020.

The sale aims to maximize the benefit for Zain KSA shareholders through reducing the company’s dependence on capital expenditures and separate the ownership, operation, and maintenance of the towers, which will strengthen the company’s financial position and allow it to focus on investing in adjacent markets and creating value for customers.

The expected impact of the transaction on Zain KSA and its operations includes a 20% equity stake in GLIC and receiving of SAR 2.4 billion.

In addition, the telco expects a net profit of up to SAR 1.1 billion, to be realized over the period of ownership transfer.

Zain KSA plans to use the proceeds to maximize the benefit for its shareholders, through a combination of debt reduction and the funding of its investment and core business.

The board of directors’ approval of the final offers was unanimous, after excluding the following related parties: Zain KSA Chairman Prince Naif bin Sultan Al Kabeer as he is also Chairman of Sultan Holding; and Zain KSA board member Saud Al-Bawardi, who works for United Company where Prince Saud bin Fahd has an interest, the statement said.

Any substantial developments will be announced in due course, the company said.

For More Mergers and Acquisitions