Logo of Fawaz Abdulaziz Alhokair Co.
Fawaz Abdulaziz Alhokair Co.’s board of directors recommended, in a meeting on Nov. 10, a 46.2% capital cut from SAR 2.1 billion to SAR 1.1308 billion, according to a filing to Tadawul.
The move aims to restructure the company’s capital to offset accumulated losses.
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Key Figures of the Capital Cut |
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Current Capital |
SAR 2.1 bln |
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Number of Shares |
210 mln |
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Reduction (%) |
46.2% (1 share for every 2.167 shares |
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New Capital |
SAR 1.1308 bln |
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New Number of Shares |
113.1 mln |
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Method |
Writing off 96.92 mln shares |
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Reason |
Restructuring the company’s capital to offset accumulated losses |
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Date |
End of second trading day after the company’s extraordinary general meeting (EGM) |
The recommendation to reduce the company's capital is subject to the approval of the related official authorities and the EGM.
Alinma Investment Co. and Credit Suisse Saudi Arabia are appointed as the financial advisors regarding the capital reduction and capital increase. Also, an announcement will be made upon submitting the company’s capital reduction application file to the Capital Market Authority (CMA) for approval.
Meanwhile, the board of directors recommended in the same meeting a capital increase through SAR 1 billion rights issue to be implemented following the capital cut completion.
The recommendation to increase the company's capital is subject to the approval of the related official authorities and the EGM.
The company aims to improve its operational and financial performance.
The capital hike will be utilized in reducing the debt ratio by repaying part of the loans which will further cut net debt to EBITDA ratio before bank expenses, Zakat, depreciation, and amortization; financing the company’s strategic expansion and studying new profitable projects in the Kingdom and major international markets; infrastructure development and acceleration of the company's digital transformation to support e-commerce; and optimizing cash flow to balance operational requirements with long-term returns.
Eligibility will be for shareholders holding shares on the day of the EGM that approves the capital hike, including those registered at the Securities Depository Center (Edaa) at the end of the second trading day following the date of the EGM. This date will be determined later.
Alinma Investment Co. and Credit Suisse Saudi Arabia will be the joint financial advisors with respect to the capital increase process. Alinma Investment Co. is appointed as the lead manager and underwriter for the proposed capital increase.
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