SVCP board proposes 56.86% capital cut, rights issue

Logo of Saudi Vitrified Clay Pipes Co. (SVCP)

Saudi Vitrified Clay Pipes Co. (SVCP) said its board of directors recommended reducing capital by 56.86% from SAR 150 million to SAR 64.72 million to restructure capital to offset accumulated losses, according to a statement to Tadawul.

The company emphasized that the capital reduction will have no negative impact on its financial obligations, operations, financial performance, or regulatory status.

The board of directors recommended today, July 21, to the EGM, following the completion of the capital reduction process, to increase the company’s share capital through a rights issue offering with a total value of SAR 90 million.

The company indicated that the capital hike aims to strengthen its financial position and provide the funding required to implement its operational and strategic plans through the capital increase.

Shareholders of record on the date of the EGM that decides to increase capital and those registered with Edaa on the second trading day following the date of the EGM, to be determined later

The company also announced the appointment of Wasatah Capital as the financial advisor and underwriter for the capital increase transaction and the submission of the company's capital increase application file to the Capital Market Authority to obtain the required approvals.

The company will announce any material developments related to this matter in due course in accordance with the applicable regulatory requirements. It will also announce the submission of the application file for the capital increase through a rights issue offering to CMA for its approval.

It noted that the capital increase is subject to obtaining the approvals of the relevant regulatory authorities and the EGM.