Riyadh-Mubasher: Saudi Telecom Co. (STC) targets acquisitions at the time of crises as it carried out some deals from 2008-2009 despite the global financial turmoil, said Abdullah bin Zaraah, analyst at Riyad Capital.
He attributed this to the fact that the telecom is one of the defensive sectors, and thus is less impacted by financial crises.
STC is still in talks over VIVA acquisition, and the deal is likely to be concluded today.
Despite the current global economic conditions, the Saudi operator seeks acquisition outside the local market, Zaraah said.
He expected VIVA deal to have a slight impact on STC’s net earnings in the medium term as VIVA’s earnings represented nearly 5% of the Saudi telco’s profits in 2014.
When asked about the deal financing, the analyst said STC has strong liquidity invested in short-term securities, and it is logical to use such liquidity in funding the share sale, in addition to issuing sukuk.
STC has financing channels such as a sukuk programme worth SAR 5 billion, of which SAR 2 billion was issued, in addition to financing channels from local banks, Zaraah said.
He sees the price offered by STC to sell VIVA at KWD 1 a share (SAR 12.37) suitable for the Saudi company, but it depends on the Kuwaiti operator’s shareholders.
Translated by Abdul Maguid Aboshahla
