Restructuring govt liabilities will not impact Saudi Electricity’s cash dividends, stock value: CEO

The process of handling net financial liabilities owed to the government will not have any impact on Saudi Electricity Co.’s (SEC) profit distributions or stock value, CEO Fahad H. Al-Sudairi said.

“The liabilities will be converted into a secondary financial instrument, classified under the shareholders' equity, and is of less priority than ordinary shares,” Al-Sudairi told Argaam on the sidelines of a press conference held on Nov. 16 on the latest structural and financial reforms in the power sector.

Thus, they will have no effect on the payouts that depend on the company’s performance and profits, he further added.

The CEO stressed that the restructuring is a positive step for the company's sustainability, improvement, and strengthening of its financial position.

According to data compiled by Argaam, SEC signed an agreement with the government to reclassify its net government liabilities worth SAR 167.9 billion into a subordinated perpetual financial equity-like instrument with a redemption option and a profit rate of 4.5% per annum.