Fawaz Alhokair board amends capital cut proposal to SAR 1.15 bln

Logo of Fawaz Abdulaziz Alhokair Co.

Fawaz Abdulaziz Alhokair Co.’s board of directors approved, today, Mar. 10, amending the previous recommendation on reducing capital to SAR 1.15 billion, the company said in a statement to Tadawul.

The company attributed the board decision to the profit reported for the third quarter ended Dec. 31, 2021, which led to a reduction in accumulated losses to 45.3% of total capital.

The planned capital reduction will have no impact on the company's financial, operational and regulatory obligations or performance, the fashion retailer noted.

The board of directors recommended also raising capital from SAR 1.15 billion to SAR 2.15 billion through a rights issue, when the capital reduction process is finalized.

The company added that there is no change with regard to the financial advisor.

Alinma Investment Co. and Credit Suisse Saudi Arabia were jointly appointed as the financial advisors regarding the capital reduction and capital increase. However, Alinma Investment will be the lead manager and underwriter on the capital increase process.

The recommendation to increase the company's capital is subject to the approval of the relevant official authorities and the EGM.

On Jan. 16, the company filed for capital reduction and increase with the Capital Market Authority (CMA).

In November 2021, Fawaz Alhokair board of directors recommended a 46.2% capital cut from SAR 2.1 billion to SAR 1.1308 billion to offset accumulated losses, Argaam earlier reported.

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.