SPM board amends capital hike recommendation to SAR 100 mln through rights issue

Saudi Paper Manufacturing Co.’s (SPM) board of directors amended its capital hike recommendation to SAR 100 million from SAR 150 million through a rights issue, the company said in a statement on Tadawul.

The decision is based on studies by the financial advisor on the back of current economic conditions, the statement added.

The company also cited expectations of receiving SAR 50 million from the government sustainability program to support insolvent firms, revaluation of some assets to be acquired, and rescheduling bank loans to improve liquidity.

The step is expected to cut capital hike costs by 22.5%.

The decision is pending approvals from the company’s general assembly and related regulatory authorities.

In September 2019, SPM recommended a capital reduction to cut its accumulated losses followed by a SAR 150 million capital hike through rights issue to restructure its capital, according to data compiled by Argaam.

Later in November, the company’s general assembly approved reducing capital by 62.45% to SAR 92 million to offset the accumulated losses.