Saudi Telecommunications Company (STC) announced on Sunday that its subsidiary, Tawal, has successfully secured Sharia-compliant bank loans amounting to a total of $1.42 billion.
This funding is earmarked for Tawal’s acquisition of three telecom tower companies from United Group in Bulgaria, Croatia, and Slovenia.
Back in April, Tawal had entered into an agreement to purchase the tower companies for €1.22 billion ($1.34 billion) from United Group.
This marked Tawal’s initial foray into the European telecommunications market.
STC disclosed that the entire transaction is fully funded through Sharia-compliant bank loans. Furthermore, the necessary approvals for the deal have been obtained, and the process was finalized on August 24.
The disclosure revealed that Saudi Arabia’s largest bank, Al-Ahli Bank (NCB), contributed a substantial $1.02 billion to the financing, including $300 million as an istisna’a loan.
Additionally, Dubai Islamic Bank and First Abu Dhabi Bank each contributed $250 million and $150 million, respectively, to the arrangement.
STC emphasized that the financial impact of this acquisition will be reflected in the third-quarter earnings.
The move to secure financing through Sharia-compliant bank loans underscores the increasing emphasis on aligning financial practices with Islamic principles.
Tawal’s expansion into the European market showcases the global growth ambitions of Saudi Arabia’s telecommunications sector, positioning it as a key player in the international telecom landscape.
