By Greg Wilson
Leading banks in Saudi Arabia have formed a consortium to lend STC $667 million for further expansion and development of the fixed line, mobile and Internet infrastructure.
Major Saudi banks have formed a consortium to lend Saudi Telecommunications Company (STC) a massive 2.5 billion SR — US $667 million — for the further expansion and development of the Kingdom’s fixed line, mobile and Internet networks.
Arab National Bank, Riyad Bank, Saudi British Bank and Arab Bank were mandated in December to provide the four-year loan. Other major banks joined the syndication before the final signing of the loan with STC in late January.
For STC, which is coming under increasing pressure to expand the Internet infrastructure within the Kingdom, the loan guarantees the next phase of development work.
News of the loan has also generated further speculation about STC’s search for a foreign partner. Towards the end of last year STC ended talks with SBC Communications which would of given the US-based company a 20-to-40% share in STC's $12 billion capital.
Saudi officials said then the Kingdom was studying a possible new strategy to privatise the telcoms sector and was on the search for another partner.