stc's board of directors announced its recommendation to the general assembly to increase the company's capital by 150% through granting bonus shares, by capitalizing SAR 30 billion from retained earnings, bringing stc's capital from SAR 20 billion (2 billion shares) to SAR 50 billion (5 billion shares), where (1.5) shares will be granted for every (1) share held by shareholders at the time of maturity. stc aims to support the company in achieving its strategy of expansion and growth, and maximizing the total return for shareholders, by increasing and diversifying investments and seizing the expected growth opportunities in the telecommunications and information technology sectors in the Kingdom and the region. The capital increase is in line with the company's vision to become the leading company in the field of communications and information technology and to lead the digital transformation locally and regionally by providing innovative digital services, products and solutions. Furthermore, the increase is also consistent with the Kingdom's vision 2030 to spur the private sector contribution in the gross domestic product (GDP) and the diversification of the Saudi economy. Prince Mohammad bin Khalid Al-Abdullah Al-Faisal, Chairman of the Board of Directors, stated: "The capital increase represents an important milestone for stc being one of the biggest listed companies in the Saudi market, as this capital increase is the largest in the history of the Saudi market. This increase will undoubtedly lead to enhancing the liquidity in the company's shares and make them more accessible to wider group of investors." stc is marching with tangible and clear steps towards achieving its strategy and vision of becoming the leading company in the field of digital and communications domain to enable the society and the economy to prosper in the Kingdom of Saudi Arabia and beyond. The company's "dare" strategy is based on four main pillars: expanding in scale and scope, enriching the customer experience, enabling digital transformation, and accelerating its assets monetization. Since the launch of its strategy, stc group has worked on many initiatives and projects that had a robust impact on increasing and diversifying the group's revenues through expansion of its core business in the Kingdom and the region, in addition to the investment made in new promising industries. These initiatives and projects have positively contributed towards sustainable and profitable growth of the company. The capital increase supports the implementation of stc's ambitious growth strategy through a series of innovative initiatives and projects, as the group began this year by launching multiple investments and partnerships in new and promising sectors. stc announced during the Leap Technology Conference this year that it is launching an initiative to establish a major digital center "MENA Hub" for the Middle East and North Africa with an investment of more than USD 1 billion in order to maximize the utilization of the huge infrastructure owned by the company in the region, including the data centers and international submarine cables. The investment will also help to take advantage of the Kingdom's strategic geographical location, connecting the three continents digitally. In line with the Kingdom's efforts to promote economic diversification through acceleration of investment cycle to stimulate investment opportunities in the cloud computing and data hosting sector in the region, stc recently along with other partners announced the establishment of a company with a total capital of SAR 894 million, specialized in cloud computing in the Kingdom with Alibaba Cloud, the leading provider of digital technology and artificial intelligence services. This partnership aims to fulfill the growing demand for cloud computing services and solutions in the region by taking advantage of stc's distinguished advantage in the region through its differentiated state of the art infrastructure, services and technology solutions. Such initiatives confirm stc's strategy to establish partnerships with major global leading companies in the field of information technology. Also, in a very promising emerging industry, stc announced this year the forming of a joint venture (JV) with the Public Investment Fund to equally establish a new company with a total capital of SAR 492 million, specialized in the field of Internet of Things (IoT) technologies. The aim of this JV is to promote and support the adoption of IoT technologies and contribute towards empowering the Internet of Things in the Kingdom and MENA region, where the company will provide qualitative technical solutions that will enable the growth of important sectors (including manufacturing, logistics, smart cities, among others.) It is expected that the capital increase will support the implementation of the group's strategy and vision, while ensuring that it continues to deliver distinguished operational and financial performance. It is also expected that the large and diversified investments made by the group will have a positive and tangible impact on the operational and financial results in the medium to long term as some of the group's new subsidiaries are in nascent stage and will start to positively reflect in group's performance as they reach operational and business maturity stage.
