Tihama publishes shareholders’ circular on 42.7% capital reduction

Logo of Tihama Advertising and Public Relations Co.

Tihama Advertising and Public Relations Co. published today, Oct. 22, the shareholders’ circular for its capital reduction by 42.7% from SAR 400 million to SAR 229.2 million.

The company said that board members confirm that reducing capital is in the interest of the company and shareholders.

It added that the certified public accountant’s study revealed that there will be no impact of the capital reduction on the company’s obligations.
 

Tihama also said it will take corrective measures to stop losses, including the following:

- The company is reducing operating expenses by terminating some employees whose salaries exceed the scope of their assigned duties, and ending investment contracts with external service providers whose services are not essential to operations due to their high costs.  It also aims to cut general and administrative expenses, such as car rentals, travel, delegation, marketing, and other non-essential items.

- It also plans to reorganize its education segment to enhance management efficiency and operational performance, thereby improving financial results and increasing revenues.

- The company is negotiating with certain product suppliers to improve procurement and supply terms, including accepting returns, with the goal of reducing slow-moving inventory and minimizing potential accounting provisions related to stock. - As part of its diversification strategy and to expand income sources, the company has signed memoranda of understanding with promising firms such as Masar Al-Ula Trading Co. and Tatweer Sports Co., to invest in new sectors, including restaurants, sports events, and e-sports.

- The company has established Tamam Ahliya for Events as a first step into the event management sector, and has also begun procedures to establish a company specializing in the training sector. - It is conducting a comprehensive evaluation of its retail branches and studying scenarios to close or exit branches with negative financial returns.

- Tihama also seeks to optimize returns on available liquidity by investing in high-yield financial portfolios and forming partnerships with accredited financial networks, thereby supporting the group’s financial performance.

- It is also developing its production division by entering into strategic partnerships with competent producers and attracting skilled professionals, to improve product quality, boost operational efficiency, and strengthen competitiveness, ultimately achieving strong financial returns.

The company clarified that the capital reduction will not affect the market value of shareholders’ portfolios.

It will aggregate any fractional shares (if any) resulting from the capital reduction into a single portfolio, which will then be sold on the market at the prevailing price, and the proceeds will be distributed to eligible shareholders within 30 days of the Extraordinary General Assembly’s (EGM) approval of the capital reduction.

According to data available with Argaam, Tihama's board of directors recommended in October reducing capital by 43.49% from SAR 400 million to SAR 226.02 million, to restructure its capital to write off the accumulated losses.