Al Kathiri revises capital-cut recommendation as accumulated losses mount

Logo of Al Kathiri Holding Co.

Al Kathiri Holding Co.’s board of directors decided, on Sept. 6, to amend its recommendation regarding the company’s capital reduction due to an increase in total accumulated losses based on the preliminary financial results for the period ended June 30, 2026.

In a statement to Tadawul, the company said the amended recommendation calls for submitting a proposal to shareholders at the extraordinary general meeting (EGM) to reduce the company’s capital and further increase it through a rights issue.

The company said the capital reduction will have no material impact on its liabilities, operations, or financial, operational or regulatory performance.

The board’s recommendation is subject to the approval of the Capital Market Authority (CMA), relevant official authorities and the EGM, the statement added.

Al Kathiri further noted that it will announce the appointment of a financial adviser at a later date, as well as the submission of the capital reduction application to the CMA for approval. It will also announce any material developments related to the matter in due course, in accordance with the relevant regulatory requirements.

Meanwhile, the board recommended increasing the company’s capital through a SAR 150 million rights issue, following completion of the capital reduction process.

The capital increase aims to strengthen the company’s financial position, provide the funding required to implement its operational and strategic plan, and repay its sukuk listed on the Saudi financial market under Tadawul code 5015.

The company said the eligibility date for shareholders to subscribe will be the date of the EGM at which the capital increase through a rights issue is approved. Eligible shareholders will be those registered in the company’s shareholder register maintained by the Securities Depository Center (Edaa) at the end of the second trading day following the EGM date.

It said it will subsequently announce the appointment of a financial adviser and the submission of the capital increase application to the CMA for approval.

The company noted that the capital increase is subject to the approval of the relevant regulatory authorities and the EGM, adding that it will announce any material developments related to the matter in due course in accordance with the relevant regulatory requirements.

It added that an announcement will be made when the application to increase the company’s capital through a rights issue is submitted to the CMA for approval.

According to data available on Argaam, Al Kathiri’s board recommended in July reducing the company’s capital by 61.27%, from SAR 113.02 million to SAR 43.78 million, to restructure the company’s capital and offset accumulated losses.

The company also announced today, Sept. 7, that the group’s accumulated losses as of June 30, 2026, reached SAR 103.37 million, representing 91.46% of the company’s capital of SAR 113.02 million.