The Saudi Public Investment Find (PIF) will own a majority stake in the business, with Zain using the resulting funds to pay down its debt
This week, Zain KSA has announced that it has completed the sale of a majority stake in its tower unit to a PIF-led consortium for roughly $805 million.
The deal was first reached in February last year, with Zai agreeing to hand over a 60% share of the business to the PIF, as well as a further 10% each to Sultan Holding Company and prince Saudi bin Fahd bin Abdulaziz.
Zain will retain the final 20% stake.
According to local media, Zain has already transferred ownership of roughly 3,000 towers to the consortium, with the remaining 5,089 to be handed over in batches over the next 18 months.
It should be noted that the deal only accounts for the company’s passive infrastructure (i.e., the towers themselves), while Zain will retain ownership of the site’s active element, such as antennae, software, and related technology.
Zain says the move will help it to reduce its debt, as well as providing capital to focus on “higher-yielding digital investments” in line with their overall strategy.
“This transaction creates enormous shareholder value and gives Zain KSA greater financial muscle to invest in cutting-edge technologies and innovation that enhance the customer mobile and data experience,” explained Bader Al Kharafi, Zain Group vice-chairman and CEO, and Zain KSA vice-chairman.
“The unlocking of capital to focus on higher-yielding digital investments and optimization of infrastructure that creates internal efficiencies is a core element of Zain’s transformational ‘4Sight’ strategy, empowering Zain to enhance the meaningful connectivity we provide the communities, businesses, and governments we serve,” he added.
The move is the latest of a long string of digital investments by the PIF, as Crown Prince Mohammed bin Salman continues to further his Vision 2030 plan for Saudi Arabia, first announced last year. As such, the PIF has said it is committed to investing $40 billion a year to develop the nation’s economy by 2025, as well as investing roughly $24 billion into the wider Middle East and North Africa (MENA) region.
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