Paper Home, Al-Modawat get CMA nod on 200% capital hike via bonus issue

Logo of Capital Market Authority (CMA)

The Capital Market Authority (CMA) approved Al-Modawat Specialized Medical Co.’s request to increase the company’s capital from SAR 23.75 million to SAR 71.25 million through the distribution of two bonus shares for each one held.

According to a statement released by the market regulator, eligible shareholders are those who have registered with the Securities Depository Center (Edaa) by the end of the second trading day after the record date, which will be decided by the company’s board of directors.

For more news on listed companies

The planned capital hike will be funded by transferring SAR 47.5 million from the share premium account. Consequently, the number of outstanding shares will increase by 47.5 million shares, from 23.75 million to 71.25 million.

Al-Modawat’s board of directors recommended in April the capital increase via bonus share by capitalizing SAR 47.5 million from the issue premium account. The move aims to bolster the company's strategic growth plan, meet future expansion needs and aspirations, and confirm its financial solvency and strong financial position.

Moreover, the CMA approved Paper Home Co.’s capital increase request from SAR 20 million to SAR 60 million by issuing two bonus shares for every one held.

Eligible shareholders will be those registered with the Securities Depository Center (Edaa) by the end of the second trading day following the record date, which will be determined later by the company’s board of directors, the market regulator said in a separate statement.

The planned capital increase will be funded by transferring SAR 40 million from the retained earnings account, thereby increasing the number of shares from 2 million to 6 million, an increase of 4 million shares.

The CMA stipulated that the date of the extraordinary general meetings (EGM) of the two companies should not exceed six months from the date of this approval and that the two companies should fulfill the relevant regulatory procedures and requirements.

According to Argaam’s data, Paper Home’s board of directors recommended, on April 28, a 200% capital hike through the issuance of bonus shares. The capital increase will be implemented by capitalizing SAR 40 million from the retained earnings account, with two bonus shares to be granted for every one held. The aim of the capital hike is to align with the company's business size and assets, in addition to supporting future growth and expansion.