stc, PIF sign JV pact to establish IoT firm with SAR 492 mln capital

stc, PIF logos

stc signed a joint venture agreement, on March 30, with the Public Investment Fund (PIF) to establish a limited liability company in the field of Internet of Things (IoT), the telecom firm said in a statement to Tadawul today, March 31.

The new company’s business is in line with the expected growth and increasing demand for IoT services and products. It aligns with stc's growth strategy and Vision 2030 for a connected nation. The new company will be headquartered in the Kingdom.

The new company will have a capital of SAR 492 million and will be equally owned by stc and PIF.

stc will finance its share of investment of 246 million from its internal resources, the statement said.

The telco stated that the joint venture agreement allows the possibility of increasing the new company’s capital up to SAR 900 million, if required, and based on the new firm’s business requirements at the end of the third financial year from the establishment date. It will, however, be subject to competent authorities and regulatory approvals.

The expected total capital injection will be in accordance with stc and PIF proportionate ownership in the new company’s capital.

The new company is expected to have a positive overall financial impact on stc. Whether the parties can proceed as planned is dependent on obtaining necessary regulatory approvals, satisfactory completion of the conditions in the joint venture agreement to establish the new company and the commencement of its commercial operation.

The telecom firm noted that the PIF is considered a related party since it is the largest shareholder in stc with a 64% stake.

Board members - Khaled Biyari, Yazeed A. Al-Humied, Rania Nashar, Arndt F. Rautenberg and Sanjay Kapoor – have an indirect interest as representatives of PIF.

Therefore, the transaction will be subject to approval from stc’s general assembly, which will be scheduled later under the relevant laws and regulations.