Saudi Arabia's Riyadh Steel Co. said its board of directors has recommended increasing the share capital through a 40% bonus share issue.

In a bourse statement on Tadawul on Tuesday the company said its capital after the increase would be 70 million riyals ($18.7 million).

The bonus shares will be issued in 4:10 ratio, the statement said. Only SAR 20 million will be capitalized from the company's retained earnings.

The capital increase will support its financial position and future growth plans, Riyadh Steel said.

(Editing by Brinda Darasha; brinda.darasha@lseg.com)