Saudi Telecom Company (STC) has signed a joint venture agreement with partners for the establishment of a limited liability company focusing on cloud computing services.
To be headquartered in the kingdom, the new company’s capital will amount to SR894m ($238m) upon establishment.
STC’s partners in the joint venture are eWTP Arabia Technology Innovation (eWTPA), Alibaba Cloud (Singapore), Saudi Company for Artificial Intelligence (Scai) and Saudi Information Technology Company (Site).
According to STC, the new company’s business is in line with the expected growth and increasing demand for public cloud services and products, and with the firm’s expansion and growth strategy.
It also aligns with Saudi Arabia’s Vision 2030 for localised cloud computing.
The new company’s share structure is:
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- STC: 55 per cent
- eWTPA: 27 per cent
- Alibaba Cloud: 10 per cent
- Scai: 4 per cent
- Site: 4 per cent
STC will finance its share of this investment, totaling SR491.7m, from its own resources, it said in a filing with the Saudi Stock Exchange (Tadawul).
The new company will require customary regulatory approvals and satisfactory completion of the conditions in the joint venture agreement.
The PIF’s ownership stake in STC and its partners makes it a related entity in the transaction
Saudi sovereign vehicle the Public Investment Fund (PIF) is a limited partner in eWTPA through its wholly owned subsidiaries, and it also owns all the shares of Scai and Site.
The PIF is considered a related party as it is the largest shareholder in STC, with 64 per cent ownership.
The following board of directors also have indirect interest as a representative of the PIF: Khaled Biyari, Yazeed AlHumied, Rania Nashar, Arndt Rautenberg and Sanjay Kapoor.
The transaction will be subject to a vote to authorise it, which is to be held at the STC general assembly, to be scheduled at a later date.