Saudi Telecom receives shareholder approval to boost capital to $13.3bn

Kingdom's largest telecoms operator also receives nod for joint ventures with PIF and Alibaba Group

The Saudi Telecom office in Riyadh. The company is looking to grow its regional operations. Reuters
Beta V.1.0 - Powered by automated translation

Saudi Telecom Company (STC), the kingdom’s biggest mobile operator, has received shareholder approval to increase its capital to 50 billion Saudi riyals ($13.33bn) to pursue local and regional growth opportunities.

The 150 per cent increase from 20bn riyals will be carried out by “capitalising 30bn riyals from the company's retained earnings”, STC said in a regulatory filing on Wednesday to the Tadawul stock exchange, where its shares are traded.

Shareholders will be granted 1.5 bonus shares for every share owned on the eligibility date as part of the transaction.

“In case of shares fractions occurrence, STC will collect all fractions in one portfolio to be sold at market price,” the company said.

“The value will be distributed to eligible shareholders each by their share within a period not to exceed 30 days.”

The objective of the increase is to support STC in achieving its growth and expansion strategy along with maximising returns to shareholders, the company said.

The move will help STC to increase and diversify investments and seize the anticipated growth opportunities in the telecommunication and technology sector in Saudi Arabia and the region, it said.

STC is playing a central role in Saudi Arabia's Vision 2030 strategy, which aims to steer its economy away from dependence on oil.

Technology is a central plank of Riyadh’s economic diversification agenda, with the kingdom projected to spend about $33bn on ICT development in 2022, the International Data Corporation said in an April report.

Saudi sovereign wealth fund Public Investment Fund has a 64 per cent stake in STC. The PIF raised $3.2bn from the sale of a 6 per cent stake in STC last year.

STC also said on Wednesday that shareholders formally approved the 492 million-riyal deal with PIF to set up an Internet of Things joint venture.

The initial capital of the venture, which is 50 per cent owned by each party, can be expanded to 900m riyals three years after its establishment, if required.

The company also received approval to form a joint venture with China's Alibaba Group to establish a cloud computing venture in Saudi Arabia at an investment of 894m riyals.

Announced in May, other companies in the joint venture include eWTP Arabia for Technical Innovation, Saudi Company for Artificial Intelligence and Saudi Information Technology Company.

Updated: August 31, 2022, 10:53 AM
EDITOR'S PICKS
NEWSLETTERS
MORE FROM THE NATIONAL