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Saudi Telecom raises $4B in offer
RIYADH, Saudi Arabia -- Saudi Telecom's $4 billion initial public share offering has closed oversubscribed, Minister of Finance and National Economy Ibrahim al-Assaf said Tuesday. Saudi Telecom, the country's sole full-service telecom operator, is floating 90 million shares, or 30 percent of the company. It offered the shares at 170 riyals ($45) each, with 10 percent for two Saudi public pension funds and 20 percent for domestic retail investors. The offer, which opened on December 17 and closed on January 6, was not available to offshore investors. Details of the subscription are due to be released later Tuesday, media reports said. In its prospectus released late last year, Saudi Telecom said the final allotment of shares would be made around February 6, and the company will start trading after that. The government's Public Investment Fund will hold the remaining 70 percent of Saudi Telecom. While it will not sell further shares immediately, the government said in the prospectus that it "remains committed to the continued privatization" of the company. Biggest debut in 20 yearsThe IPO is the biggest for Saudi Arabia in 20 years, potentially valuing Saudi Telecom at $13.5 billion. That would make it the market's second-largest listed company after the petrochemical giant Saudi Basic Industries Corp. (SABIC) In its prospectus, Saudi Telecom said revenue for the six months to June 2002 was 11.25 billion riyals ($3 billion), with net income of 1.3 billion riyals ($348 million). It said it had 3.27 million fixed line subscribers at the end of last June, and 3.46 million mobile subscribers. But the breakdown for 2001 shows that fixed lines -- which includes leased circuits, telex and Internet -- provided 59 percent of sales, with just 41 percent of sales coming from mobile services. Saudi Telecom's Internet service, SaudiNet, ranks third among 25 operators in the local market, with about 12 percent of the market. Saudi Arabia has a population of 23.5 million, with about 70 percent of households having a fixed phone line.
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