Mobile Telecommunication Company Saudi Arabia (Zain KSA) said Monday that it sold a majority stake in its tower infrastructure to Golden Lattice Investment Company (GLIC), partly owned by the sovereign wealth fund Public Investment Fund (PIF), for $800 million (SAR 3 billion).
Zain KSA is selling at least 8,069 tower infrastructure and retains ownership of all other equipment from wireless communication antennas, software, technologies, and internet protocols (IPs), the company said in a disclosure statement to the Saudi bourse.
The company noted that GLIC is owned by PIF (60%), Zain KSA (20%), Prince Saudi bin Fahd bin Abdulaziz (10%), and Sultan Holding Company (10%).
Initially, at least 3,000 towers will be transferred, while the remaining towers will be transferred within a period not exceeding 18 months.
The sale will benefit the shareholders of Zain by reducing the company’s dependence on capital expenditures and separating the ownership, operation, and maintenance of the towers, which will lead to strengthening the financial position of the company. It will also enable the telecom service provider to focus on investment in adjacent markets and create value for its customers.
The transaction will result in an expected net profit of up to $290 million (SAR 1.1 billion) to be realized within a period not exceeding one-and-a-half years for transferring ownership of the towers in batches.
Zain KSA will use the proceeds of the asset sale to maximize the benefit for its “shareholders through a combination of debt reduction and the funding of its investment and its core business,” noted the disclosure statement.
The telecoms service provider transferred the ownership of its subsidiary Zain Business Limited to Saudi's PIF, a statement showed on October 16, 2022. Thereafter, PIF changed the unit's name to the GLIC, the statement said, adding that it became the holding company selling Zain KSA's tower infrastructure.
Kuwait-based Zain Group has a 37% stake in Zain KSA. The Saudi telecom service firm provides mobile telecommunications network for individuals and businesses in the kingdom.
