#Saudi Telecom To Raise Capital by $8 Billion In Bonus Shares - Bloomberg

Saudi Telecom To Raise Capital by $8 Billion In Bonus Shares - Bloomberg

Saudi Telecom Co., the most profitable mobile operator in the Middle East, will increase its capital by 30 billion riyals ($8 billion) through the issuance of bonus shares. The stock rose.

The company, which is controlled by the kingdom’s sovereign wealth fund, plans to issue 1.5 bonus shares for every existing share, through capitalizing retained earnings, according to a statement. This will raise STC’s capital to 50 billion riyals, making it the largest capital increase by a Saudi company, Chairman Prince Mohammad bin Khalid Al-Faisal, said in the statement.

STC shares jumped as much as 9.8% on Sunday before paring gains, posting its biggest daily rise in eight years, while the country’s benchmark index declined.

The capital increase comes as STC has been embarking on a plan to expand into new business lines, selling off stakes in some of its units, and looking for international acquisitions. In the past few years its grown its digital payments arm to be valued at over $1 billion, listed a stake in its Internet services arm, and said it would spin off its data center, submarine cables and points-of-presence assets into a new firm.