Maadaniyah recommends 7.4% capital cut, followed by SAR 120 mln rights issue

Logo of Maadaniyah

National Metal Manufacturing and Casting Co.’s (Maadaniyah) board of directors recommended a 7.4% capital cut from SAR 281.12 million to SAR 260.31 million through writing off 2.08 million shares (1 share for every 13.51 shares), during a meeting held on Feb. 28, 2021.

The capital reduction is intended to restructure the company’s capital to write off the accumulated losses, Maadaniyah said in a bourse statement.

There is no impact of reducing the company's capital on its financial obligations, the statement added, noting that the recommendation is subject to the approval of the related official authorities and the extraordinary general assembly meeting (EGM).

Meanwhile, the board of directors recommended a capital hike through SAR 120 million rights issue to be implemented following the capital cut.

The approval of the EGM on the process of increasing the company's capital by offering rights issue is conditional on the company’s EGM approval of the proposed capital reduction.

The capital hike mainly aims at raising Maadaniyah’s financial solvency, and decrease borrowing rates and the financing costs incurred, the statement added.

Eligibility will be to shareholders holding shares on the day of the EGM that approves the capital hike including those registered at the Securities Depository Center (Edaa) at the end of the second trading day following the date of the EGM, the date of which will be determined later.

The process of capital increase is subject to the approval of the related official authorities and the EGM.

Wasatah Capital has been appointed as the financial advisor regarding the capital reduction and capital increase. Also, an announcement will be made upon submitting the company’s capital reduction application file to the Capital Market Authority (CMA) for approval.

For More IPOs