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Red Sea International Co.’s board of directors recommended reducing capital by 48.44% from SAR 600 million to SAR 309.39 million (one share for each 2.065 shares), to write off the accumulated losses, the company said in a bourse filling.
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Capital Cut Details |
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Current capital |
SAR 600 mln |
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Number of shares |
60 mln |
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Reduction (%) |
48.44% (one share for each 2.065 shares) |
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New capital |
SAR 309.39 mln |
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New number of shares |
30.94 mln |
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Method |
Canceling 29.06 mln |
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Reason |
To restructure the company's capital to write off its accumulated losses and support future plans |
The capital reduction will not impact the company’s obligations, operations, or even financial, operating and regulatory performance.
The move is pending the approval of competent authorities and upcoming extraordinary general meeting (EGM).
Meanwhile, the board recommended a capital increase to SAR 459.39 million, following the capital reduction, through offering a rights issue worth SAR 150 million, as follows:
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Capital Increase Details |
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Capital after reduction |
SAR 309.39 mln |
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Number of shares after reduction |
30.94 mln |
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Increase (%) |
48.48% (8 shares for each one share outstanding) |
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Capital after increase |
SAR 459.39 mln |
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Number of shares after increase |
45.94 mln |
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Increase method |
Adding 15 mln shares |
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Reasons |
To support the company’s working capital, enhance its financial solvency, build a modern factory in the Central Region, and develop the firm’s capabilities in residential compounds management, in addition to other purposes |
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Eligibility |
Shareholders of record on the EGM date and who are registered with the Securities Depository Center Co. (Edaa) at the end of the second trading day following the EGM date |
The capital increase is pending the approval of competent authorities and the upcoming EGM.
The board of directors also decided to appoint Al Rajhi Capital as a financial advisor for the capital reduction and increase. This will be announced when submitting the file of capital reduction and increase to the Capital Market Authority (CMA) for approval.
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