Care International Board of Directors Adopts Strategic Direction to Address Accumulated Losses

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Care International has announced the board of directors' recommendations regarding accumulated losses, adopting a strategic direction to address them through capital restructuring. The board authorized management to take all necessary actions to study and implement appropriate legal alternatives, including reducing capital to offset accumulated losses followed by a capital increase, or any other legal alternative that achieves the same purpose. The company stated in a Tadawul announcement that this is in the best interest of the company and its shareholders, in accordance with relevant regulations and laws, while completing all legal procedures and obtaining necessary approvals. It added that it has begun the process of appointing a licensed financial advisor from the Capital Market Authority to study available options for addressing accumulated losses and restructuring capital. The executive management has been tasked to coordinate with the financial advisor upon appointment, along with the legal advisor and external auditor, to prepare a detailed plan and necessary studies, and submit them to the board for consideration and final decision regarding the recommendation to the extraordinary general assembly. It also noted that the balance of the statutory reserve, amounting to SAR 13.57 million as of the financial statements ended December 31, 2025, has been transferred to the accumulated losses item to offset part of the company's accumulated losses. Additionally, the entire balance of the share premium account, amounting to SAR 41.77 million as of the financial statements ended December 31, 2025, has been transferred to the accumulated losses item to offset part of the company's accumulated losses. The company recommended to the extraordinary general assembly to approve the company's continuation, and stated that it will announce the latest developments in this regard as they occur. It also mentioned that any subsequent financial impact or material developments will be announced after completing the financial advisor's studies, their approval by the board, and obtaining relevant regulatory approvals.

It also clarified that the extraordinary general assembly had previously approved items three and four, concerning the transfer of the statutory reserve balance and the share premium balance to accumulated losses. The effect of this transfer will appear in the company's interim financial statements for the period ending June 30, 2026.

The company also emphasized that the board's decisions represent initial recommendations to address accumulated losses and to begin completing necessary studies and legal procedures. At this stage, they do not represent a final recommendation to reduce or increase capital. Any final recommendation or material developments will be announced in due course in accordance with relevant regulations, laws, and instructions. According to Argaam data, Care International recorded losses of SAR 45.8 million by the end of 2025, compared to profits of SAR 459.4 thousand achieved during the same period in 2024. Accumulated losses by the end of 2025 amounted to approximately SAR 148.434 million, representing 123.7% of capital.

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