Saudi Telecom shares rise on $8 billion capital raise proposal

Saudi Telecom said on Sunday that its board had proposed to increase the company’s share capital by $8 billion (30 billion riyals), or 150 percent, raising the share price by about 10 percent.

For the latest headlines, follow our Google News Channel online or through the app.

The Riyadh-listed company previously announced that the proposed capital increase would include the issuance of 30 billion new shares, with shareholders offering 1.5 new shares for each share they owned.

It sent shares up 9.8 percent to 110.2 riyals in early trade before retreating slightly to 107 rials, up 6.6 percent from the start of trading on Sunday, according to data from Refinitiv.

“This increase will undoubtedly increase the liquidity of the company’s shares and make them more accessible to a wider group of investors,” said Chairman of the Board of Directors Prince Mohammed bin Khalid Al-Abdullah Al-Faisal.

In a statement, he said that the company’s so-called “Gourage” strategy is based on four main pillars: expanding scale and scope, enriching the customer experience, enabling digital transformation, and accelerating the monetization of its assets.

Last year, STC listed its arm, Arabian Internet & Communications Services Company, which raised $966.35 million.

Saudi Telecom said in the statement that the capital increase through retained earnings will support growth and expansion plans.

The company, in which Saudi Arabia’s government holds a 64 percent stake through the Public Investment Fund’s Sovereign Wealth Fund, also said the board had proposed reducing the dividend policy.

Under the proposal, the three-year dividend policy will be reduced from 1 rial ($ 0.26) per share paid quarterly to 0.40 rial ($ 0.10) from the fourth quarter of 2021 onwards.

The recommendation was in response to a proposed share capital increase, although the board will continue to consider additional dividend payments, the company said.

Read more:

Saudi Telecom sets up new wholly-owned unit for data centers, cable assets

Saudi Arabia’s PIF, Telecom Giant STC Form Company to Focus on Internet of Things

Saudi Arabia to localize jobs in theme parks, entertainment centers


Get the best of Newspaper delivered to your inbox daily

Most Viewed

Related Stories