DUBAI, April 24 (Reuters) - Minority investors in Saudi Integrated Telecom Co (SITC) will receive 30 riyals ($8) per share for their stakes in the firm that is due to be wound up, a 23 percent premium on the last traded price, according to a royal decree issued this week.
The order follows a separate decree last May demanding the liquidation of the company, which never launched services despite making a winning 1 billion riyals ($266.64 million) bid for a fixed telecom licence in 2007.
SITC’s founding shareholders, which include chairman Prince Saud bin Khaled bin Abdullah al-Saud, own the majority of the company.
Its shares were suspended in February 2013 when the stock was trading at 24.35 riyals and the dissolution order prompted some investors, who feared losing their money, to hold a rare protest outside offices of the Capital Market Authority (CMA).
This week’s decree should assuage those worries, with non-founding shareholders to be paid 30 riyals per share.
“Since SITC is a new case for the Saudi financial market, it is expected the compensation will take a few months,” Hisham al-Askar, a lawyer for SITC’s minority investors specialising in commercial cases and company case law, told Reuters.
It was unclear who would pay the compensation, which totals 1.05 billion riyals.
SITC held cash and equivalents of 816 million riyals at the end of 2012, according to Thomson Reuters data. The decree said the Ministry of Finance will replace non-founding shareholders in SITC’s liquidation process.
SITC did not respond to requests for comment.
SITC listed on Riyadh’s bourse in 2011 after the company sold 30 million shares in an initial public offering and a further 5 million shares to a state pension fund, all at 10 riyals per share. Combined, this is 35 percent of its stock.
Prince Saud owns 43 percent of the company and Hong Kong’s PCCW owns 15 percent, according to Thomson Reuters data.
The Communications and Information Technology Commission (CITC) refused to grant SITC its licence, saying it had failed to meet requirements. ($1 = 3.7503 Saudi Riyals) (Additional reporting by Yara Bayoumy; Editing by Erica Billingham)