City Cement approves 26% capital cut, creditors objection period starts tomorrow

Shareholders of City Cement Co. approved a 26% capital cut to SAR 1.4 billion from SAR 1.89 billion, on having a capital surplus, during the extraordinary general meeting (EGM) held on Aug. 25, the company said in a statement to Tadawul.

The capital will be decreased as the company has excess capital.

The capital reduction will be financed from the company’s internal resources. However, the cement producer signed Islamic loan agreements with Saudi British Bank (SABB) and Riyad Bank at a total value of SAR 50 million each, to be used in the capital reduction process.

City Cement explained that these facilities would be only be used, if the company was unable to fully finance the process from its own resources. The facilities are non-binding and will carry no commission or administrative fees, in case they are not used.

The company added that the capital cut will not have any material impact on its obligations, operations, operating or financial performance, expecting the move to reflect positively on profitability and key performance indicators.

In a separate statement, the company said that creditors’ objection period will begin tomorrow, Thursday, Aug. 27, 2020 and will continue until Oct. 25, 2020.

Creditors are allowed to object to the process trough sending registered mail to the company’s head office.