Riyadh-Mubasher: Saudi Telecom Co.'s (STC) offer to to increase VIVA stake is credit positive for the Saudi operator as it will benefit from greater dividend flows from an increasingly cash-flow-generative VIVA in the high average revenue per user (ARPU) Kuwaiti mobile sector, global rating agency Moody's said.
Majority ownership of VIVA would allow STC to make quick unilateral decisions to capitalise on a resilient dollarized growth market.
"We see limited risk to STC pursuing this transaction, given that its annual EBITDA generation exceeds its total debt, giving it the capacity to comfortably fund the acquisition," the agency said.
STC agreed to acquire the Kuwaiti government’s indirect 24% stake at the same price per share as offered to the remaining 50% equity holders.
