Arabian Pipes gets CMA nod on capital hike via SAR 300 mln rights issue

Logo of Arabian Pipes

The Capital Market Authority (CMA) approved Arabian Pipes Co.’s request to increase capital via SAR 300 million rights issue.

The increase will be limited to the shareholders registered with the Securities Depository Center (Edaa) as of the closing on the second trading day after the extraordinary general meeting (EGM), which will be determined by the company’s board later.

The company will determine the offering price and the number of shares offered for subscription after the market closes on the same day of the EGM.

The rights issue prospectus will be posted and made available to the public at a later time.

The CMA’s approval of the prospectus should not be considered as a recommendation to participate in the offer nor invest in the company’s shares.

The approval of the prospectus merely means that the legal requirements as per the Capital Market Law and its Implementing Regulations have been met.

The capital increase is intended to support working capital, strengthen the company's financial position, reduce the borrowing rate, develop and modernize factories in Riyadh and Jubail, as well as to expand a number of products supporting pipe services within the company's business.

Necessary procedures will be taken to call for the extraordinary general assembly meeting for the capital increase, Arabian Pipes said.

Future updates in this regard will be announced, the company added.

Last month, the company's shareholders approved reducing the company's capital by 75%, from SAR 400 million to SAR 100 million, Argaam reported.

In June 2021, Arabian Pipes board recommended the capital reduction to restructure the company's capital and offset accumulated losses. A SAR 300 million rights issue was also proposed to raise capital.

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