Aramco Digital is reportedly preparing to invest about $1 billion to take a minority stake in Mavenir, news which comes after credit agency S&P Global claimed the open-RAN pioneer does not have sufficient liquidity to repay its debt obligation.

Reuters reported a deal, with discussions ongoing and not certain to be finalised, would value the cloud-native network infrastructure provider at about $3 billion.

A Mavenir spokesperson declined to comment on the news when contacted by Mobile World Live.

Aramco Digital, a subsidiary of oil giant Saudi Aramco, is also looking to invest $200 million in a joint venture with Mavenir in the Middle East, Reuters stated.

Notably, CEO of Aramco Digital, Tareq Amin, has vast experience with open RAN technology, having served as CTO of Rakuten Mobile. The Japanese company became the first mobile operator to build an end-to-end virtualised telecoms infrastructure in 2020.

Debt load
S&P Global last month wrote it doesn’t believe the software vendor can repay the outstanding balance on its $133 million term loan obligation maturing in January 2025. As of 31 July 2024, the company had about $17 million cash on the balance sheet and about $32 million availability on its senior secured revolving credit facility.

It added the vendor needs an additional $120 million to cover cash outflow over the next six months and the upcoming loan in January.

In May, Mavenir announced it lined a $75 million investment from an existing investor.

The ratings agency attributed its underperformance to weakness in its key customer revenue and high R&D expenses in the open RAN business, which it expects will continue in the near term.

In addition to a cash crunch, Mavenir faces a soft overall RAN market and open RAN segment.

Dell’Oro predicted in October RAN revenue would trend downwards until 2029, with figures for 2024 suggesting a second consecutive year of steep decline.

In August it warned of stalling momentum in the open RAN market.

Early in the year, Aramco Digital formed a partnership with Intel to establish the first open RAN development centre in Saudi Arabia.

The investments are part the digital unit’s early moves to support Saudi Arabia’s Vision 2030, a government programme with the goal of increasing economic and cultural diversification.