stc shareholders approve 150% capital hike to SAR 50 bln

Logo of stc 

Shareholders of stc approved increasing the company’s capital by 150% through a bonus-share distribution during an extraordinary general assembly meeting (EGM) held on Aug. 30, according to a bourse filing.

The increase will be through capitalizing SAR 30 billion from the retained earnings via granting 1.5 share for each 1 share owned by shareholder on the eligibility date.

Meanwhile, the shareholders also approved amending the dividend distribution policy.

Approvals were also granted for the business and contracts between stc and Walaa Cooperative Insurance Co., where board member Jameel A. Al-Mulhem an indirect interest.

The business and contracts between stc and eWTPA Technology Innovation Limited Company, Alibaba Cloud (Singapore) Private Limited, Saudi Company for Artificial Intelligence (SCAI) and Saudi Information Technology Company (SITE) for signing a joint venture agreement (JV) to establish a limited liability company specialized in cloud computing with a total capital of SAR 894 million upon establishment.

The Public Investment Fund (PIF) is a related party –the largest shareholder in stc with 64% ownership, as well as a limited partner in eWTPA through its wholly owned subsidiaries. PIF also owns all the shares of SCAI and SITE.

In addition, following board members have indirect interest as a representative of the PIF: Khaled Biyari, Yazeed AlHumied, Rania Nashar, Arndt Rautenberg and Sanjay Kapoor.

Shareholders approved the business and contracts between stc and PIF for signing a JV agreement to establish a limited liability company specialized in the field of internet of things (IoT), with a total capital of SAR 492 million upon establishment.

The JV allows the possibility to increase the company’s capital up to SAR 900 million, as needed, and based on the company’s business requirements, at the end of the third financial year from establishment, and subject to the competent authorities and regulatory approvals, with 50% ownership for both stc and PIF.

The PIF is a related party and the following board members have indirect interest as a representative of the PIF: Khaled Biyari, Yazeed AlHumied, Rania Nashar, Arndt Rautenberg and Sanjay Kapoor.

Additionally, shareholders approved the repurchase of a number of stc’s shares at a maximum of 15 million shares. The proposed shares to be repurchased reflect the possible 150% increase in the telco’s capital for an amount not exceeding SAR 453 million to be allocated under its employee stock incentive plan.

The repurchase will be financed from the telecom operator’s own resources. Further, the board of directors, or whoever it delegates, will be authorized to complete the repurchase within 12 months from the EGM approval date. The repurchased shares will be kept no longer than seven years from the EGM approval date. Once the period lapses, stc will follow the rules and procedures stipulated in the relevant laws and regulations. 

Meanwhile, the Saudi Exchange (Tadawul) announced that daily trading fluctuation limit after stc’s capital raise will be based on a share price of SAR 41.60 riyals as of today, Aug. 31, and the outstanding orders will be canceled. 

The Securities Depository Center (Edaa) will deposit the additional shares into investor portfolios by Sept. 4.