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Saudi Telecom Company announces a sale of equity stake in one of its subsidiaries.

Element List Introduction
Explanation Saudi Telecom Company-stc (the company) announces the signing of an agreement with Western Union company on 21/11/2020G corresponding to 06/04/1442H to sell an equity stake in Saudi Digital Payments company (stc pay) (%100 owned subsidiary) with a value of USD 200 million (SR 750 million).
Transaction Details
Explanation Saudi Telecom Company (stc) sells a 15% stake of (stc pay) (%100 owned subsidiary) to Western Union company (the buyer) for a cash consideration of USD 200 million (SR 750 million). The proceeds of the deal will be used to finance stc pay’s capital.
Transaction Value
Explanation USD 200 million (SR 750 million).
Transaction Terms
Explanation 1. The completion of the deal is conditional upon obtaining all regulatory approvals from relevant authorities.

2. Upon completion of the deal, the buyer pays an amount of USD 133.3 million (SR 500 million) for a 10% equity stake in stc pay.

3. The buyer pays an amount of USD 66.67 million (SR 250 million) if stc pay obtains a digital banking license; which would increase the buyer's equity stake in stc pay to 15%.

Parties of the Transaction
Explanation Saudi Telecom company (stc), Western Union company, Saudi Digital Payments company (stc pay).
Transaction Funding Method
Explanation N/A
Transaction Execution Date
Explanation 2020-11-21 Corresponding to 1442-04-06
Description of the Business of the Asset forming the Subject Matter of the Transaction
Explanation Providing digital payments services
Asset Book Value
Explanation stc pay’s capital stands at SR 400 million, in addition to a shareholder loan in an amount of SR 148 million that was provided by stc which would be converted into a capital in stc pay upon the completion of the deal.
Financial Statements for the Last Three Years of the Asset forming the Subject Matter of the Transaction
Explanation N/A
Transaction reasons
Explanation To support stc pay’s strategic and expansion plans.
Expected Impact of the Transaction on the Company and Its Operations
Explanation In the long term, the financial impact is expected to be positive. This deal has no impact on the profit or loss statement of stc in accordance with international financial reporting standards-IFRS.
Details of Using The Proceeds of the Asset Sale
Explanation The proceeds of the deal will be used to finance stc pay’s capital in order to enhance its internal resources and support its strategic and expansion plans.
Related Parties
Explanation None
Additional Information
Explanation stc will inject SR 400 million as an additional capital which would increase stc pay’s capital to SR 1.45 billion upon the completion of the deal.

stc will also inject an additional SR 802 million into stc pay’s capital in the event that a digital banking license is obtained.

Any material developments will be announced in due course.

ELEMENT LIST EXPLANATION
Introduction Saudi Telecom Company-stc (the company) announces the signing of an agreement with Western Union company on 21/11/2020G corresponding to 06/04/1442H to sell an equity stake in Saudi Digital Payments company (stc pay) (%100 owned subsidiary) with a value of USD 200 million (SR 750 million).
Transaction Details Saudi Telecom Company (stc) sells a 15% stake of (stc pay) (%100 owned subsidiary) to Western Union company (the buyer) for a cash consideration of USD 200 million (SR 750 million). The proceeds of the deal will be used to finance stc pay’s capital.
Transaction Value USD 200 million (SR 750 million).
Transaction Terms 1. The completion of the deal is conditional upon obtaining all regulatory approvals from relevant authorities.

2. Upon completion of the deal, the buyer pays an amount of USD 133.3 million (SR 500 million) for a 10% equity stake in stc pay.

3. The buyer pays an amount of USD 66.67 million (SR 250 million) if stc pay obtains a digital banking license; which would increase the buyer's equity stake in stc pay to 15%.

Parties of the Transaction Saudi Telecom company (stc), Western Union company, Saudi Digital Payments company (stc pay).
Transaction Funding Method N/A
Transaction Execution Date 2020-11-21 Corresponding to 1442-04-06
Description of the Business of the Asset forming the Subject Matter of the Transaction Providing digital payments services
Asset Book Value stc pay’s capital stands at SR 400 million, in addition to a shareholder loan in an amount of SR 148 million that was provided by stc which would be converted into a capital in stc pay upon the completion of the deal.
Financial Statements for the Last Three Years of the Asset forming the Subject Matter of the Transaction N/A
Transaction reasons To support stc pay’s strategic and expansion plans.
Expected Impact of the Transaction on the Company and Its Operations In the long term, the financial impact is expected to be positive. This deal has no impact on the profit or loss statement of stc in accordance with international financial reporting standards-IFRS.
Details of Using The Proceeds of the Asset Sale The proceeds of the deal will be used to finance stc pay’s capital in order to enhance its internal resources and support its strategic and expansion plans.
Related Parties None
Additional Information stc will inject SR 400 million as an additional capital which would increase stc pay’s capital to SR 1.45 billion upon the completion of the deal.

stc will also inject an additional SR 802 million into stc pay’s capital in the event that a digital banking license is obtained.

Any material developments will be announced in due course.