Raydan Food clarifies measures after accumulated losses hit 53.16% of capital

One of Raydan Food’s branches

Raydan Food Co. announced today, Aug. 28, the legal measures to be taken after accumulated losses reached 53.16% of capital.

In a bourse statement, the company indicated that the board is required to call for an extraordinary general meeting (EGM), under Article 150 of the Companies Law, before Sept. 8.

The deadline for the EGM to address accumulated losses is Oct. 8, in accordance with the same Article.

Raydan will be deemed dissolved by force of law should the aforementioned EGM does not convene within 45 days from the date on which the board learned about such losses, or if the EGM meets and was unable to issue a decision on the matter.

Article 150 also stipulates that if losses of a joint-stock company amount to half of the paid-up capital, at any time during the fiscal year, any official of the company or the auditor must immediately inform the Chairman, who should keep board members in the loop in this regard.

Within 15 days of the announcement, the board should convene an EGM in 45 days maximum to decide whether to increase or cut the firm’s capital to bring losses to less than half of the paid-up capital, or dissolve the company before the term specified in its articles of association.

The company shall be deemed dissolved by force of law if the EGM did not meet within the period specified in Article 150/1, or it fails to issue a decision on the matter, or approves increasing the company’s share capital but the shares issued are not fully subscribed for by its shareholders within 90 days from the date of the resolution to increase the share capital.

Raydan Food’s board recently recommended reducing capital by 53.16% from SAR 337.50 million to SAR 158.08 million to offset accumulated losses, during an EGM held last week, according to Argaam’s data.