STC today announces that it has reached an agreement to sell its subsidiary in Indonesia AXIS (STC owns an 80.10% stake directly and a 3.725% stake indirectly) to XL which is a major operator in the Indonesian market.
The transaction values AXIS at an enterprise value of USD865 million equivalents to SR 3,243 million for 100% of the company on a cash free and debt free basis.
As part of the transaction AXIS debts with its lenders and vendors will be settled. As announced previously on 21/07/2013 the principle of the transaction was approved by the Board of Directors of STC which authorized STCs management to engage in negotiations with the prospective buyer senior lenders and other creditors of AXIS.
As the Board of Directors authorized the finalization of the negotiation and the conclusion of the transaction. These negotiations were successfully concluded today.
The completion of the transaction remains subject to the applicable Indonesian regulatory approvals as well as the approval of XL shareholders at its Extraordinary General Meeting.
STC reclassified its investment in AXIS as a held-for-sale asset as at 30/06/2013.
According to this classification the group measured the net assets related to the investment at fair value and recognized a realized loss of SR 705 million during the 2nd quarter of 2013.
The final impact on STCs financials will be determined at the closing of the transaction and will be announced separately.
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