Petro Rabigh’s board scraps plans for capital cut to 8.01% from 13.76%

Logo of Rabigh Refining and Petrochemical Co.

Rabigh Refining and Petrochemical Co.’s (Petro Rabigh) board decided today, March 31, to scrap its recommendation for a capital cut and will withdraw the file submitted to the Capital Market Authority (CMA), according to a bourse statement

The company’s application to CMA for a capital increase by offering a rights issue remains underway, pending the necessary regulatory approvals, including the approval of the extraordinary general assembly.

The board concluded that the capital reduction is “no longer beneficial” to Petro Rabigh, thanks to the company’s improved financial performance in which accumulated losses saw a significant drop of 32% at the end of 2020 to 8% by the end of last year.

Costs related to the capital increase process by offering rights shares will be disclosed in the rights issue prospectus. Any material developments will be announced in due course, the company said.

In February, Petrol Rabigh’s board had revised its recommendation to cut the company’s capital from SAR 8.76 billion to SAR 7.55 billion, then increase the company’s capital by offering rights shares valued at SAR 7.95 billion, in a bid to strengthen its equity base and reduce the company's obligations.

The board's earlier decision to amend its previous recommendation was only related to capital reduction. The board did not amend its recommendation in relation to capital increase by way of a rights issue.