Saudi Telecom Company to establish a company specialized in cloud computing in the Kingdom of Saudi Arabia
May 23, 2022
Saudi Telecom Company (stc) announces the signing of a Joint Venture Agreement on 22-05-2022 with eWTP Arabia Technology Innovation Limited Company (eWTPA), Alibaba Cloud (Singapore) Private Limited (Alibaba Cloud), Saudi Company for Artificial Intelligence (SCAI) and Saudi Information Technology Company (SITE) to establish a limited liability company (the New Company) specialized in cloud computing services. The New Company’s business is in line with the expected growth and increasing demand for Public Cloud services and products, and it aligns with stc's expansion and growth strategy, and Saudi Arabia's Vision 2030 for a localized hyperscaler cloud computing. The New Company will be headquartered in the Kingdom of Saudi Arabia.
The New Company’s capital will amount to SAR 894 million upon establishment, and the shares are distributed as follow:
- stc 55%
- eWTPA 27%
- Alibaba Cloud 10%
- SCAI 4%
- SITE 4%
stc will finance its share of this investment, totaling SAR 491.7 million, from its own resources.
The New Company is expected to have a positive overall financial impact on stc in the long term. However, the establishment of the new company is dependent on obtaining customary regulatory approvals, and satisfactory completion of the conditions in the Joint Venture Agreement.
It is worth mentioning that the Public Investment Fund (PIF) is a limited partner in eWTPA through its wholly owned subsidiaries and owns all the shares of SCAI and SITE. PIF is considered a related party as it is the largest shareholder in stc (with 64% ownership) and the Board of Directors following members have indirect interest as a representative of the PIF: H.E Dr. Khaled H. Biyari, Mr. Yazeed A. AlHumied, Ms. Rania M. Nashar, Mr. Arndt F. Rautenberg and Mr. Sanjay Kapoor. Therefore, this transaction shall be subject to a vote to authorize it from stc’s general assembly (which will be scheduled at a later date) in accordance with the relevant laws and regulations.
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