STC announces TAWAL’s acquisition of 3 tower companies in Europe, financing the deal through bank loans at $1.42 billion

Saudi Telecom Company (stc) announced that (Telecommunications Towers Company) TAWAL had received all the necessary approvals and formally completed its acquisition of 3 towers companies from United Group in Bulgaria, Croatia and Slovenia countries for a cash consideration for the entire transaction on 24.08.2023.

The company stated on Sunday on Tadawul that after the closing of this transaction, TAWAL’s towers portfolio under its ownership and management has reached more than 21,000 towers across 5 countries. This acquisition represents a unique addition to stc complete digital ecosystem.

It added that the financial impact will appear in the consolidated financial statements for the third quarter of 2023.

STC noted that TAWAL financed the cash consideration for the transaction through shariah compliant bank loan totalling USD 1.42 billion; the breakdown is as follows:

1. Saudi National Bank USD 1.02 billion (USD 0.3 billion out of the total loan amount is a bridge loan).

2. Dubai Islamic Bank USD 0.25 billion.

3. First Abu Dhabi Bank USD 0.15 billion.

It is worth noting that there is a related party with respect to the loan arrangement, in which a member of the Board of Directors, Mr. Yazeed Alhumied has an indirect interest being a member of the Board of Directors of stc and Saudi National Bank. Further, the Public Investment Fund is considered a major shareholder in both stc and Saudi National Bank.

This comes with reference to the announcement made by Saudi Telecom Company (stc) on the Saudi Exchange dated 25.04.2023 related to its subsidiary (Telecommunications Towers Company -TAWAL) signing a sale and purchase agreement (SPA) on 20-4-2023 to acquire 3 towers companies from United Group in Bulgaria, Croatia and Slovenia countries for a cash consideration for the entire transaction. The transaction will be based on 100% Enterprise Value amounting to EURO 1.220 billion, which equals approximately SAR 5 billion. It was agreed that the transaction cash consideration will be based on the agreed terms of the SPA in relation to debt, cash, and working capital.