Saudi Telecom shares rise on $8 billion capital increase proposal

By Alexander Cornwell

DUBAI (Reuters) – Saudi Telecom mentioned on Sunday its board had proposed growing the corporate’s share capital by 30 billion riyals ($8 billion), or 150%, driving the share value almost 10% larger.

The Riyadh-listed firm had earlier introduced the proposed capital improve would contain issuing 30 billion new shares, with shareholders provided 1.5 new shares for every share owned.

That despatched shares up as a lot as 9.8% to 110.2 riyals in early commerce earlier than retreating barely to 107 riyals, up 6.6% from the beginning of commerce on Sunday, in line with Refinitiv knowledge.

“This improve will undoubtedly result in enhancing the liquidity within the firm’s shares and make them extra accessible to wider group of buyers,” chairman of the board of administrators Prince Mohammad bin Khalid Al-Abdullah Al-Faisal mentioned.

In a press release, he mentioned the corporate’s so-called “dare” technique is predicated on 4 important pillars: increasing in scale and scope, enriching the client expertise, enabling digital transformation, and accelerating monetisation of its belongings.

Final 12 months STC listed its unit Arabian Web and Communications Companies Co, elevating $966.35 million.

Saudi Telecom mentioned in assertion the capital improve via retained earnings would assist progress and growth plans.

The corporate, through which Saudi Arabia’s authorities holds a 64% stake via sovereign wealth fund the Public Funding Fund, additionally mentioned the board had proposed trimming the dividend coverage.

Underneath the proposal, the three-year dividend coverage in place because the fourth quarter of 2021 can be reduce from a 1 riyal ($0.26) fee per share per quarter to 0.40 riyal ($0.10).

That suggestion was in response to the proposed share capital improve, although the board would proceed to think about further dividend funds, the corporate mentioned.

($1 = 3.7513 riyals)

(Writing by Alexander Cornwell; Modifying by William Mallard and Catherine Evans)