Red Sea plans to wipe out all accumulated losses before end-2025

Logo of Red Sea International Co.

Red Sea International Co. announced a strategic plan to write off all accumulated losses recorded in its Q2 2025 financial statements before the end of 2025, as part of a financial restructuring aimed at enhancing growth and profitability, according to a statement to Tadawul.

The company said it is seeking shareholder approval at an extraordinary general meeting (EGM) to increase capital through a debt conversion. The move is intended to reduce the accumulated losses percentage and strengthen the company’s financial position.

The board of directors highlighted in the shareholders’ circular that the proposed conversion supports the company’s financial standing and strategy focused on cost reduction and profit improvement.

If approved, Red Sea International will issue 18.03 million ordinary shares, increasing capital from SAR 302.34 million to SAR 482.67 million.

The nominal capital increase will directly reduce accumulated losses from 97.73% to 61.2% of capital, based on results in the Q2 2025 financial statements.

Issuing all shares related to the debt conversion will result in a share premium of SAR 295.69 million. The board said it intends to recommend using the entire share premium to offset the remaining accumulated losses, expected at 61.2%, after the capital increase is completed.

Subject to approval by shareholders, accumulated losses are expected to fall to 0% of capital based on the Q2 2025 financial results. The write-off is expected to be reflected in the 2025 financial statements.

Approval of all items related to the capital increase is considered a key part of the restructuring plan, which the company said is already starting to show positive impact on operations and financial performance following the acquisition of 51% of Fundamental Installation for Electric Work Co. Ltd. (First Fix).

The acquisition aims to expand into new business areas and improve profitability, operational efficiency, and margins. First Fix is currently preparing to file for a Main Market (TASI) listing, which is expected to support sustainable growth.

The company urged shareholders to carefully review the circular before voting on the EGM agenda items.