In a significant strategic move reflecting its strong financial position, Networkers Saudi Arabia announced the results of its recent Extraordinary General Assembly meeting (first meeting). The results included formal approval of a capital increase for Networkers , as part of the company's ongoing efforts to enhance its expansion plans and meet the expectations of its shareholders in the Saudi financial market.
Details of the decision to increase Networkers' capital and distribute shares
In an official statement published on the Saudi Stock Exchange (Tadawul) website, the company clarified that the results of the general assembly's vote included approval of the board of directors' recommendation to increase Networkers' capital by distributing bonus shares to the company's shareholders. Accordingly, the capital will increase from SAR 60 million to SAR 75 million, representing a 25% increase. Consequently, the number of shares will increase from 6 million to 7.5 million.
The company noted that this increase will be covered by capitalizing SAR 15 million from retained earnings. The company will grant one bonus share for every four shares held. Regarding the entitlement date, shareholders who own shares on the date of the Extraordinary General Assembly meeting and are registered in the company's shareholder register at the Securities Depository Center Company (Edaa) at the end of the second trading day following the entitlement date will be eligible. In the event of fractional shares, these will be consolidated into a single portfolio for all shareholders and sold at the market price. The proceeds will then be distributed to eligible shareholders according to their respective shares within a period not exceeding 30 days from the date of determining the eligible shares.
Economic context and growth of the services sector in the Kingdom
This move comes at a time when the Saudi economy is undergoing radical transformations and rapid growth, driven by the objectives of Vision 2030, which focuses on diversifying income sources and supporting the private sector. The services, information technology, and communications sector is among the most prominent sectors receiving significant government support, given its vital role in digital transformation and infrastructure development. Companies operating in this field are benefiting from this positive environment to enhance their competitiveness and expand their customer base, which is reflected positively in their financial performance and their ability to achieve sustainable profits. This allows them to capitalize profits and distribute bonus shares instead of cash dividends that could affect their operating liquidity.
Strategic importance and expected impact of the decision
Through this capital increase, the company aims to achieve several strategic objectives, most notably strengthening its strategic growth plan and meeting the needs of future expansions. Domestically, this decision contributes to bolstering investor confidence in the Saudi financial market, reflecting the ability of listed companies to generate retained earnings and reinvest them in their capital structure. Regionally, strengthening the financial positions of Saudi companies makes them more competitive in Gulf markets and supports their pursuit of new strategic partnerships. Emphasizing financial solvency and a strong financial position sends a powerful message of reassurance to both shareholders and business partners.
Amendments to the bylaws and future aspirations
In addition to the financial resolutions, the Extraordinary General Assembly approved amendments to certain articles of the company's Articles of Association to align with recent developments. Specifically, Article (7) concerning capital and Article (8) concerning share subscription were amended. These amendments reflect management's commitment to modernizing governance frameworks and ensuring compliance with applicable regulations, paving the way for a new phase of sustainable corporate growth that serves the interests of all stakeholders.
