Ash-Sharqiyah Development Chairman says capital increase only solution to resume commercial operations

Ash-Sharqiyah Development Co. Chairman Ali Al-Jaafari

Ash-Sharqiyah Development Co.  faced several major challenges over the last period due to the suspension of some of its projects, Chairman Ali Ali Al-Jaafari told CNBC Arabia.

He added that capital increase is the only solution for the company to resume its commercial operations.

The capital hike will help the company to reinvest in agricultural and food security projects, as the firm obtained seven licenses from the Ministry of Environment, Water and Agriculture. After securing shareholders' approval, it will launch the projects.

The company is updating price quotations after a recent rise in some production elements, Al-Jaafari said, indicating that it is studying the available options to start investments.

Ash-Sharqiyah Development is optimistic that there will be no fundamental changes during the coming period, the chairman added.

After the prospectus publication within the next two or three weeks, the company will take the necessary measures to invite shareholders for an extraordinary general meeting (EGM) to approve the capital increase recommendation, Al-Jaafari indicated. He expected them to approve the plan for the firm’s interest.  

He also added that an underwriter was mandated for the offering, and there is no concern about the rights offering coverage.  

On Nov. 28, the Capital Market Authority (CMA) approved the company’s capital increase plan through a SAR 225 million rights offering, Argaam reported. 

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