Saudi Cable rejects debt assignment to protect shareholders’ rights: CEO

Saudi Cable Co.’s (SCC) current board of directors had recommended to the extraordinary general meeting (EGM) to veto the debt assignment agreement with Tathmeer Investment Co. and Al Rajhi Bank in order to safeguard the company’s interests and shareholders’ rights, Managing Director and CEO Khalid Khashoggi said.

 

In an interview with Argaam, Khashoggi emphasized that the current board, elected in April 2024, is committed to enhancing shareholders’ investments. Therefore, it opted to fend off any decision posing a potential harm to the company or could hurt its financial and operational trajectory.

 

In a statement picked up by Argaam earlier today, June 23, SCC announced its board's proposal to reject the debt transfer agreement involving Tathmeer, Al Rajhi Bank, and SSC, as well as the debt capitalization agreement converting Al Rajhi Bank's debt into equity shares for Tathmeer, citing conflicts with shareholders' interests.

 

It clarified that both agreements included a provision requiring approval from the EGM, rather than solely from the previous board of directors.

 

The company stated that the debt capitalization deal, which proposed converting the debt into equity shares for Tathmeer, required—under Article 126 of the Companies Law—the EGM's approval and the appointment of an independent expert to assess the fair value of the shares, instead of relying on the nominal value specified in the agreement.

 

The board recommended that the EGM utilize its power to scrap these deals in order to safeguard the company’s interests, protect shareholders’ rights, strengthen investments, and avert any potential harm to the company.

 

SSC’s shareholders approved the board’s proposal to reject the debt assignment agreement between Tathmeer, Al Rajhi Bank, and SSC during its meeting held on June 22. The veto decision was approved by a majority quorum of 92.98%, according to Argaam’s data.

 

Shareholders also disapproved the debt capitalization agreement that entailed the conversion of Al Rajhi Bank's debt into equity shares in favor of Tathmeer, with 92.95% in votes.