Saudi Telecom shares rise on $8 billion capital increase proposal

A person passes the Saudi Telecom STC workplace in Riyadh, Saudi Arabia February 6, 2018. REUTERS/Faisal Al Nasser

DUBAI, June 12 (Reuters) – Saudi Telecom (7010.SE) mentioned on Sunday its board had proposed rising the corporate’s share capital by 30 billion riyals ($8 billion), or 150%, driving the share worth almost 10% larger.

The Riyadh-listed firm had earlier introduced the proposed capital enhance would contain issuing 30 billion new shares, with shareholders supplied 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 accordance with Refinitiv knowledge.

“This enhance 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 relies on 4 primary pillars: increasing in scale and scope, enriching the shopper expertise, enabling digital transformation, and accelerating monetisation of its belongings.

Final yr STC listed its unit Arabian Web and Communications Providers Co, elevating $966.35 million.

Saudi Telecom mentioned in assertion the capital enhance by retained earnings would assist development and enlargement plans.

The corporate, during which Saudi Arabia’s authorities holds a 64% stake by 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 could be minimize from a 1 riyal ($0.26) cost per share per quarter to 0.40 riyal ($0.10).

That suggestion was in response to the proposed share capital enhance, 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

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