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Raydan Food Co. attains CMA greenlight to implement 53.7% capital reduction
The Capital Market Authority (CMA) approved the request submitted by Raydan Food Co. to reduce its capital from SAR 158.08 million to SAR 73.14 million, the market regulator said in a statement today, Sept. 18.
The capital cut is still subject to approval of the company's extraordinary general meeting (EGM) and the completion of the necessary procedures as per the applicable regulations.
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The authority further stated that this approval is not an endorsement of the feasibility of the capital reduction, as it only signifies the company’s compliance with the regulatory requirements under the Capital Market Law and its implementing regulations.
According to Argaam’s data, Raydan’s board of directors recommended in May a 53.74% capital cut to SAR 73.14 million from the current SAR 158.08 million to offset accumulated losses.
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Capital Cut Details |
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Current Capital |
SAR 158.08 mln |
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Number of Shares |
15.81 mln |
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New Capital |
SAR 73.14 mln |
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New Number of Shares |
7.31 mln |
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Percentage of Decrease |
53.74% |
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Reason |
Restructuring capital and offsetting accumulated accrued losses |
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Date of Capital Reduction |
By the close of the second trading day following the EGM that will decide on the capital cut |
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Method |
Writing off 8.5 mln shares at 0.53736 shares for every share held |
Notably, the company plans to raise capital through a rights issue valued at SAR 155 million after completing the capital reduction process. This will help it carry out its expansion plans, support working capital, and improve its financial position.
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