Saudi Cable discovered ‘formal, substantive errors’ in FRP: Chairman

Abdullah Alghabin, Chairman of Saudi Cable Co.

Saudi Cable Co.'s Chairman Abdullah Alghabin said that the current board of directors reviewed the financial restructuring plan and discovered “formal and substantive errors” in the financial restructuring procedure (FRP).

The company was forced to address the court after the procedure trustee refused to respond to its observations, he told Al Arabiya TV, adding that the court decided to cancel the trustee’s decision to submit the FRP.

Among the violations discovered in the FRP was aboliting the right of pre-emption for shareholders. In addition, the capitalization process was introduced by granting 64 million shares at nominal value, which is within the jurisdiction of the extraordinary general assembly. However, the Chairman clarified that floating the current stakes owned by shareholders exposed them to a loss of about 90% of the value of their equity.

Alghabin added that Saudi Cable's debt reached SAR 770 million, of which about SAR 300 million is scheduled over six years, and about SAR 400 million will be repaid immediately through the capital increase process.

The company's share in its Bahraini associate, Midal Cables, has a market value of about SAR 1.7 billion. The company can, therefore, dispose it by partially mortgaging or selling it, Alghabin stated.

Saudi Cable can raise SAR 1.7 billion if it sells the entire share, as per the offers received, he added.

The Chairman further said that the company may not sell its stake in Midal but mortgage a part stake to raise up to SAR 200 million, which will be used as working capital.

Saudi Cable announced, on June 9, that, based on its objection to the FRP for entailing formal regulatory violations and false financial information, the Fourth Commercial Circut in Jeddah held a court hearing and took several decisions in this regard.

The court ratified cancelling the request by the procedure trustee, Walid Sobhi, to submit the FRP to the court.

The court hearing also concluded that the court retracted its decision issued on 11/06/1445 AH, to accept the deposit of the FRP submitted by the procedure trustee.

In addition, Saudi Cable must prepare the alternative proposal within 22 days from the date of issuance of this decision and submit it to the respective department, according to Argaam's data.