Al-Omran announces uses of rights issue proceeds

Logo of Al-Omran Industrial Trading Co.

Al-Omran Industrial Trading Co. announced the developments in the uses of its rights issue proceeds, as per the issuance’s prospectus attached to the Capital Market Authority’s (CMA) approval on the former's capital top-up.

The company received a net amount of SAR 57.15 million, after deducting the public offering-related expenses worth SAR 2.85 million as of Dec. 10, 2023.

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Part of this amount was utilized to contract with Kirby Building Systems to supply steel buildings for Al-Omran's new factory complex in Sudair City for SAR 4.95 million.

Furthermore, Al-Omran contracted with Al Istqama Al Methalya Contracting Co. (IMCON) for the construction of the Sudair City plant for SAR 12.30 million. It also purchased two land plots in Sudair City, spanning 1,045 square meters (sqm), in preparation for the construction of workers’ housing at SAR 1.2 million.

Moreover, the company purchased 26 new vehicles for SAR 1.94 million, to be used to transport its products. Besides, it repaid bank loans worth SAR 14 million on their due dates.

The company also bought some machinery and production lines worth SAR 681,000, adding that multiple offers are being studied to procure the remaining production lines and paint ovens.

Al-Omran noted that the new factory complex in Sudair City will cover a total area of 57,000 sqm. Its construction is expected to be completed by the end of 2024, with production starting in late Q1 2025.

The development of production lines aims to increase productivity and reduce production-related costs to boost profitability. The related financial impact is slated to be positive, depending on these variables during Q2 2025.

The company will announce any fundamental developments in this regard in a timely manner.

It recently offered six million rights shares at SAR 10 each, totaling SAR 60 million. This is to increase its capital to SAR 120 million from SAR 60 million, Argaam earlier reported. 

Al-Omran’s rights offering was 95.31% covered. Investors subscribed to 5.71 million out of six million shares on offer at SAR 57.19 million. The rump offering was 627.67% oversubscribed.