stc plans new data center hosting company with SAR 100 mln capital

Logo of stc

stc plans to establish a new company specializing in datacenter hosting, international and regional connectivity, the telecom major said in a bourse filing today, Feb. 2

The wholly-owned firm, based in Saudi Arabia, will have an initial capital of SAR 100 million. It will be self-financed by stc.

The telco intends to transfer its data centers, international submarine cables and international points of presence assets to the new company. These assets have an initial valuation of approximately SAR 2.1 billion as of December 2021.

Furthermore, the new company is expected to inject SAR 1.7 billion as an additional investment, bringing the total investment to SAR 3.8 billion.

These assets and investments will be subject to a detailed evaluation at a later stage to determine their final valuation, in addition to determining the final capital needed for the new firm upon completion of the necessary regulatory requirements.

The establishment of the new company is expected to have a positive impact on stc, which cannot be determined until the completion of customary regulatory requirements and obtaining relevant approvals.

The initiative to establish the new company will boost Saudi Arabia’s current position as the region’s digital hub and beyond by leveraging Saudi Arabia’s geographical location as a hub connecting Asia, Africa and Europe.

The new firm will manage and continue to invest in submarine cables, including new ones landing in multiple points of Saudi Arabia. It will also manage data centers and continue to invest in new ones across the Kingdom and the region, as well as other digital infrastructure to attract foreign direct investments localize content and cloud services.