The board of directors of Saudi Arabia’s biggest mobile operator has recommended a 150 percent increase in its capital to fund its expansion across the Middle East.
On Sunday Saudi Telecom Company (STC) recommended increasing the company’s capital to 50 billion Saudi riyals ($13.33 billion) through the offering of bonus shares, according to the Saudi Press Agency.
Shareholders will be given 1.5 bonus shares for every share owned on the eligibility date as part of the transaction, the company said in a statement to Tadawul, the Saudi stock exchange, where its shares are traded.
The increase will support STC’s “growth and expansion strategy along with maximising its shareholders’ return”, it said.
The deal is also expected to help the company to diversify its investments and seize growth opportunities in the telecommunication and technology sector in the kingdom and across the region.
STC is majority-owned by the Saudi sovereign wealth fund Public Investment Fund (PIF) with a 64 percent stake.
“The capital increase represents an important milestone for STC being one of the biggest listed companies in the Saudi market, as this capital increase is the largest in the history of the Saudi market,” chairman of the board Prince Mohammad bin Khalid Al Abdullah Al Faisal said in a statement posted on STC’s website.
The company’s current “dare” strategy is based on four main pillars: expanding in scale and scope, enriching the customer experience, enabling digital transformation and accelerating its assets monetisation.
The move is also in line with the Kingdom’s Vision 2030 to spur the private sector’s contribution to economic growth and to diversify the Saudi economy.
In February, STC announced during the Leap Technology Conference that it was launching an initiative to establish a major digital centre, the MENA Hub, with an investment of more than $1 billion.
The investment will also help to take advantage of the Kingdom’s strategic geographical location, connecting the three continents digitally.
STC also recently announced the establishment of a company specialising in cloud computing, with a range of partners including Alibaba Cloud. The partnership aims to take advantage of STC’s infrastructure, services and technology solutions.
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