Alujain surprised at NATPET’s rejection of 2018 dividend payment despite stake acquisition

Alujain Corp clarified in a Tadawul statement on Monday the latest developments about its affiliate, The National Petrochemical Industrial Co. (NATPET).

Following is the company's full statement to Tadawul:

1) Directing NATPET to submit its quarterly financials on time to avoid trading suspension on Alujain stock: Both companies are taking procedures to avoid trading suspension until the Ministry of Commerce and Investment (MCI) solves pending issues between public and closed joint stock companies with respect to quarterly financials.

2) Dividend distribution for 2018 and acquisition of stake in Alujain: NATPET acquired 10.7% of Alujain for a total value of over SAR 200 million, though the acquisition is not part of NATPET’s core objectives. Alujain was surprised, as NATPET had earlier rejected the extraordinary general meeting’s decision on June 26, 2019 regarding dividend payment at SAR 1 per share, totaling SAR 107 million, under the pretext of tight liquidity.

3) Inviting shareholders to a general assembly meeting: Alujain more than once asked NATPET board of directors to hold a general assembly meeting and vote on directing the company to submit its quarterly figures on time to avoid trading suspension on Alujain stock.

Shareholders are also requested to elect a new board for the new term starting from June 1, 2020. NATPET’s board, however, has not responded for more than five months in breach of the Saudi Companies Law and governance regulations.

Therefore, Alujain sent a letter to MCI requesting it to order NATPET to hold a general assembly meeting, but Alujain has not yet received a response from the ministry in this regard.

4) NATPET’s CEO statement to Argaam on Dec. 17: The company’s CEO told Argaam:

A) NATPET’s IPO in the Saudi Stock Exchange (Tadawul) was “still on the table”, but needs cooperation from all partners.

B) The company has recently received funds and is expecting more collections in January, which will bring the total amount received to $320 million (SAR 1.2 billion).

C) The funds received are recognized under amounts under account. They will be included in financial statements following the insurance firm’s approval of the final allocation. He also expected this allocation to be announced next month.

D) NATPET boosted its production capacity by almost 60,000 tons to 460,000 tons. The capacity addition is forecast to raise profit by SAR 50-60 million.

Therefore, Alujain on Dec. 19, 2019, asked NATPET to officially confirm this information, so that the Saudi-listed company can update its investors. However, no reply has been yet received from NATPET.

In June 2018, Alujain has also asked NATPET’s board of directors to convene a general assembly meeting to vote on listing the company’s shares on Tadawul, but NATPET’s board has not invited shareholders to attend any meeting. This in turn shows Alujain’s no-objection to NATPET’s listing.

Accordingly, Alujain board disclaims all responsibility for NATPET’s board violations.

Alujain is cooperating with the competent official authorities to protect the company and its shareholders from non-compliant practices, the statement concluded.