Tihama gets CMA nod on 42.7% capital reduction

Logo of Tihama Advertising and Public Relations Co.

The Capital Market Authority (CMA) approved Tihama Advertising and Public Relations Co.’s request to reduce capital by 42.7% from SAR 400 million to SAR 229.2 million, the market regulator said in a statement today, Oct. 15.

The planned 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.

The company will publish a disclosure document to its shareholders related to the proposed method of capital reduction and the expected impact of this move within sufficient time prior to the deciding EGM.

The CMA resolution is not an endorsement of the feasibility of the capital reduction. It only endorses the company’s compliance with the regulatory requirements under the Capital Market Law and its implementing regulations.

According to Argaam’s data, Tihama’s board of directors had recommended, on March 25, a 43.49% capital cut from SAR 400 million to SAR 226.02 million, in the efforts to restructure the company's capital to amortize accumulated losses.

Last August, the board decided to amend its capital reduction proposal from 43.49% to 42.7%, through writing off 17.08 million existing shares.