The government of Saudi Arabia has commissioned the Gulf International Bank (GIB) to manage the initial public offering of the Saudi Telecommunications Company (STC) by the end of the year. Some 30 percent of STC’s shares worth $960 million will be available for purchase.
The Saudi government began the telecom privatization process by passing control of the national services to the joint stock STC. Gradually taking over from the Ministry of Post, Telephone and Telegraph (PTT), STC carried out major telecommunication projects kingdom-wide, while treading a path that would eventually enable it to operate on a commercially competitive basis.
The private sector was expected to acquire equity participation in the STC by the end of 2000 with the option of foreign involvement. However, this was delayed when the Saudi Supreme Economic Council announced that foreign investors were banned from involvement in the local telecom sector.
The Council is expected to lift the ban on foreign investments in the sector by modifying the list of sectors barred to foreign investors. In 2001, the Kingdom’s Consultative Council passed a draft bill to end the state’s monopoly of the telecom sector. The bill, which is subject to government approval, allows for the establishment of new shareholding companies while not ruling out foreign investors. — (menareport.com)
© 2002 Mena Report (www.menareport.com)
