stc shares surge after $8bn capital increase proposal
Saudi Telecom Company (stc) shares rose by almost 10% following news of a potential capital increase proposal from its board.
stc is reportedly weighing up on whether to increase its share capital by US$8 billion, it said in a statement yesterday.
This will involve issuing 30 billion new shares, with shareholders offered 1.5 new shares for each share owned.
As a result, its share price surged according to Refinitiv data.
The company, which is controlled by Saudi’s sovereign wealth fund has been working on a plan to extend into new business lines, selling some of its units and looking for international acquisitions.
This much was evident when it was announced earlier this month that the firm had acquired 89.49% of Giza Systems Company for US$158 million.
The acquisition follows a number of investments already made by the group. At the beginning of the year, stc established an IoT partnership with the Public Investment Fund (PIF) as well as an investment of US$1 billion in data centres and subsea cables.
The PIF raised around US$3.2 billion from selling some of its shares in STC last year, making it the largest secondary offering in Europe, the Middle East and Africa region in 2021, leaving t with a 64% stake in the company.
In February, it invested in Pakistan-based tower company Awal Telecom as it looks to expand outside of its domestic market.
And last year, it listed its Arabian Internet and Communications Service Co unit, raising US$966.35 million.