DUBAI, Sept 15 (Reuters) - Saudi Telecom Co (STC)
has asked banks to pitch for roles in a potential public
offering of its products and services development arm, three
sources familiar with the matter told Reuters.
STC, Saudi Arabia's largest telecoms operator, sent a
request for proposals to international and local banks last week
for Solutions by STC(STCS), said the sources, who declined to be
identified as the matter is not public.
The company did not communicate with banks its planned deal
size, they said.
STCS last year had over 5 billion riyals ($1.33 billion) of
revenues and profit in the range of 500 million riyals, which
would be a sizable offering, they said.
The company's valuation could be around 9 billion riyals
($2.4 billion), if it garners 18-20 times its earnings
multiples, one of the sources said.
The IPO size could be around $500 million if the company
sells 20%, the source said.
STC did not respond to a request for immediate comment when
contacted by Reuters.
The country has witnessed a flurry of public offerings this
year as companies tap into Saudi demand for shares since oil
giant Aramco's record IPO last year.
Saudi Arabia is encouraging more companies to list in a bid
to deepen its capital markets under reforms aimed at reducing
its reliance on oil.
Supermarket retailer BinDawood Holding earlier this week set
an indicative price for its initial public offering, seeking to
raise as much as 2.19 billion riyals ($585 million) in a Riyadh
($1 = 3.7508 riyals)
(Reporting by Hadeel Al Sayegh and Saeed Azhar; editing by
Jason Neely and Louise Heavens)