Saudi Arabia’s Public Investment Fund (PIF) has divested a portion of its stake in Saudi Telecom Co. (STC) for approximately $1 billion, marking the latest move in the kingdom’s ongoing efforts to raise capital to fund its ambitious economic transformation plan. The PIF sold 100 million shares, representing a 2% stake in STC, at 38.6 riyals ($10.27) per share—a 6% discount to the stock’s closing price of 41.1 riyals on Wednesday.
The PIF, the key player behind Saudi Arabia’s Vision 2030 initiative, is focused on diversifying the country’s economy away from its reliance on oil. As part of this strategy, the fund has been progressively reducing its holdings in certain portfolio companies to generate cash flow. Bloomberg News reports that the PIF has been actively looking to streamline its investments.
This latest transaction comes on the heels of the PIF’s decision to further reduce its stake in Japanese gaming giant Nintendo Co., following a broader sell-off in the company that began in August. Over the past year, the fund has also tapped bond markets to supplement its financing efforts.
The PIF’s increasing need for capital is driven by a combination of lower oil prices and a growing budget deficit. In response, the Saudi government has been re-prioritizing projects to align with available resources. Earlier this year, the government raised approximately $12.4 billion by selling a portion of its stake in Saudi Aramco, the world’s largest oil company.
In addition to its holdings in STC, the PIF boasts a diverse portfolio that spans industries such as electricity, utilities, and mining. Its investments include stakes in Saudi Electricity, ACWA Power, Saudi Tadawul Group (the kingdom’s stock exchange operator), and Saudi National Bank, among others. The fund also holds a controlling stake in Saudi Arabian Mining Company (Ma’aden), a $52 billion commodities firm.
Secondary offerings like this are rare in the region. The PIF previously sold part of its stake in STC in 2021, raising $3.2 billion in the process. That sale followed comments by Crown Prince Mohammed bin Salman, who stated that the fund should not hold investments in local companies “forever.”
Despite the sale, the PIF will remain STC’s largest shareholder, retaining a 62% stake in the telecom giant. The share sale was jointly coordinated by Goldman Sachs and SNB Capital.
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