The IPO will see 24,000,000 shares sold – equivalent to 20% of the company – and HSBC, Morgan Stanley and the investment banking arm of Saudi lender National Commercial Bank, have been hired as advisors.
The approval was granted by Saudi Arabia's Capital Market Authority on Monday and is valid for six months.
Solutions by STC – officially called Arabian Internet Communications Services Co. – provides managed services to more than 24,000 clients across the public and private sectors, including the Saudi Ministry of Education, Aramco and the Ministry of Health.
Its all-male leadership team is headed by CEO Omer Alnomany.
Meanwhile STC Pay has been granted a digital banking licence following cabinet approval.
Now officially a fintech, STC Pay will be converted into a digital bank with paid-up capital of SAR2.5 billion ($666.7 million). STC will invest SAR802 million to retain 85% of STC Pay's share capital and Western Union will invest SAR750 million for the remaining 15%.
Historic year ahead
Saudi Tadawul Group CEO, Khalid Al Hussan, told CNBC earlier this year that he expects 2021 to be "historic" for IPOs in Saudi Arabia. This follows a record 2020, during which the IPOs of four major regional players raised a combined $1.45 billion. Calculations by Reuters put this ahead of Germany's combined IPOs that year, which reached values of $1.3 billion.
In fact, there are so many IPOs on the cards that even the Saudi stock market itself, Tadawul, is to go public this year. In preparation it was converted into a holding company in April, becoming Saudi Tadawul Group, and now operates as four subsidiaries: The Saudi Exchange, a dedicated stock exchange business (previously known as the Saudi Stock Exchange Company - Tadawul); the Securities Clearing Center Company (Muqassa); the Securities Depository Center Company (Edaa); and Wamid – a new "innovative applied technology services business".
