Fakhariya's Board Recommends Reducing Capital by 56.86% and Increasing It via Rights Issue

Logo of the Saudi Company for the Production of Clay Pipes

The Board of Directors of the Saudi Company for the Production of Clay Pipes recommended reducing capital from 150 million riyals to 64.72 million riyals, a reduction of 56.86%, to restructure the company's capital to offset accumulated losses, as shown in the table below:

Details of Capital Reduction

Current capital

150 million riyals

Number of shares

15 million shares

Capital after reduction

64.72 million riyals

Number of shares after reduction

6.47 million shares

Reduction percentage

56.86%

Reason for reduction

Restructuring the company's capital to offset an amount of 85.28 million riyals from accumulated losses

Date of reduction

End of the second trading day following the extraordinary general assembly meeting that decides the capital reduction

Method of reduction

Canceling 8.53 shares equivalent to 0.568562 shares per 1 share owned, so that the company's capital after reduction becomes 64.72 million riyals.

The company stated in a statement on Tadawul that no material negative impact is expected on its obligations, operations, or financial, operational, or regulatory performance as a result of the capital reduction.

The company's board also recommended in its meeting held today for the extraordinary general assembly, after completing the capital reduction process, to increase the company's capital through a rights issue of shares worth 90 million riyals.

It explained that the company aims through the capital increase to support the financial position and provide necessary financing to implement the operational and strategic plan.

It added that the right to subscribe is for shareholders who own shares on the day of the extraordinary general assembly meeting that approves the capital increase via a rights issue, and who are registered in the company's shareholder register at the Depository Center at the end of the second trading day following the date of the extraordinary general assembly meeting.

It mentioned that Al-Wasata Financial Company (Wasata Capital) has been appointed as financial advisor for the capital reduction process and underwriter for the capital increase, and to submit the application file for reducing and increasing the company's capital to the Capital Market Authority to obtain necessary approvals.

It added that any material developments regarding the two processes, including submitting the application file for capital reduction and increase to the Capital Market Authority, will be announced as they occur and in accordance with relevant regulations and instructions.

It indicated that the capital reduction and increase processes are subject to approvals from relevant regulatory authorities and the extraordinary general assembly.

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