Saudi Telecom Company, Saudi Arabia’s largest telecommunications company, has announced that it signed a preliminary agreement with Vodafone to buy 55 percent stake in its unit in Egypt.
The deal to buy shares in Vodafone Egypt is expected to cost Saudi Telecom around $2.4 billion.
In a bourse statement, Saudi Telecom revealed that the non-binding Memorandum of Understanding, which both parties signed, values Vodafone Egypt at $4.4 billion and is valid for 75 days from Wednesday. The time period can, however, be extended with mutual consent.
The other 45 percent in Vodafone Egypt is owned by Telecom Egypt.
The African telecommunication company recently debunked claims that it could sell its stake in Vodafone Egypt. Over the last one year, speculations mounted that Telecom Egypt could sell its stake in Vodafone Egypt.
Last week, Saudi Telecom reported that its net profit dropped by 22 percent in the fourth quarter of 2019 due to lower operating profits and a rise in expenses.
By the end of December 31st, net profits fell to SR2.41 billion, the telco said in a bourse statement. Operating profits for the period also decreased by 31 percent to SR.4 billion when compared to the same period in 2018. Revenue, however, remained flat at SR13.27 billion during the same period.
Saudi Telecom, which is owned by the kingdom’s Public Investment Fund with a controlling stake on 70 percent, reported a drop in net profit of 0.2 percent in 2019.
The telco also announced that it will distribute SR2 billion interim dividends to shareholders for the fourth quarter of 2019. Dividends will be distributed at SR1 per share, which represents 10 percent of the share’s par value.