Riyadh – Mubasher: Saudi Telecom Company (stc) signed an agreement with Western Union to sell a 15% equity stake in its fully-owned subsidiary Saudi Digital Payments (stc pay) for $200 million (SAR 750 million).

Upon the completion of the deal, Western Union will pay $133.3 million (SAR 500 million) for a 10% equity stake in stc pay, the company said in a statement to the Saudi Stock Exchange (Tadawul) on Sunday.

If stc pay receives a digital banking licence, the buyer will pay $66.67 million (SAR 250 million), which would raise Western Union’s equity stake in stc pay to 15%.

stc pay’s capital currently amounts to SAR 400 million, in addition to a shareholder loan worth SAR 148 million, which was provided by stc and would be converted into capital in stc pay upon the completion of the deal.

The proceeds of the deal, still pending regulatory approvals, will be used to finance stc pay’s capital, enhance its internal resources, and support its expansion plans.

stc will pump SAR 400 million as an additional capital which would raise stc pay’s capital to SAR 1.45 billion upon the completion of the deal and an additional amount of SAR 802 million if a digital banking licence is obtained.

The deal has no impact on the financial statements of stc in accordance with international financial reporting standards (IFRS).