Saudi Arabia's biggest mobile operator – STC, has seen its shareholders approve its request to increase capital to a cool SR50 billion ($13.33 billion). The plan is to use the injection of cash to boost local and regional growth opportunities.
Saudi-listed STC will increase its current SR20 billion ($5.33 billion) capital to SR50 billion through issuing bonus shares, it said in a stock exchange filing. Shareholders will be granted 1.5 bonus shares for every share owned on the eligibility date as part of the transaction. The move comes after the company reported SR5.9 billion in profit at the end of the first six months of the year, along with SR2 billion in quarterly dividends.
With the increase, STC said it will be able to achieve its growth and expansion strategy as well as maximize its shareholders' returns through increasing and diversifying its investments. STC is seen as a crucial cog in the Kingdom's Vision 2030 strategy, which aims to move the nation's economy further away from its dependence on oil.
Why it matters
Technology is a core tenet of Saudi's long-term economic diversification plan. The nation plans to splash out about $33 billion on ICT development in 2022 alone according to the International Data Corporation. The company also received approval to form a joint venture with China's Alibaba Group (BABA, $95.52) to establish a cloud computing venture in Saudi Arabia at an investment of 894m riyals.