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Edarat Shareholders Approve 50% Bonus Share Capital Increase
Edarat shareholders approved a SAR 30M bonus share issue that lifts capital from SAR 60M to SAR 90M. One bonus share per two held, with record date pending.
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Edarat Communication and Information Technology Co. said its shareholders approved a 50% capital increase through bonus shares. The company will transfer SAR 30 million from retained earnings to its capital base. The move lifts Edarat's capital from SAR 60 million to SAR 90 million.
Shareholders will receive one bonus share for every two shares held. The record date for entitlement has not been set, the company said in a filing to the Saudi stock exchange.
Bonus share issues increase the number of outstanding shares without distributing cash. The company's market value and each shareholder's proportional ownership remain unchanged. The structure can improve liquidity and make the stock more accessible to a broader investor base.
Edarat provides IT services including cloud computing, cybersecurity, and digital transformation consulting to government and corporate clients in Saudi Arabia. The company listed on the Saudi Exchange's main market in 2022. It reported a 22% rise in net profit for 2025, driven by higher contract volumes and margin expansion in its core services segment. The company has been expanding its data center capacity and adding headcount to meet demand from the public sector's digitalization push.
The capital increase uses retained earnings rather than new cash from shareholders. That signals management's confidence in the company's growth trajectory and its ability to fund expansion internally. The timing follows a period of strong earnings growth, supporting the decision to reward shareholders through a stock distribution.
Shareholders at the extraordinary general meeting also approved amendments to the company's bylaws to reflect the new capital structure. No further capital increases are planned at this stage, the filing said.
For current shareholders, the bonus issue increases the number of shares they hold. The stock price will adjust on the record date to account for the new shares. Trading volume may increase as the broader float improves liquidity. The company will announce the record date and timeline for the share distribution in a separate filing.