Nama Chemicals unveils turnaround plan to offset losses

Nama Chemicals Co. approved a restructuring plan to face challenges in the global epoxy resins market and offset its accumulated losses, the company said in a statement to Saudi bourse, Tadawul on Sunday.

The board of directors recommended restructuring the company’s product line to replace imports with domestic specialty chemicals, so as to bolster profit margins.

Nama’s capital would be increased to enhance production capacity of epoxy, chemicals and specialty resins.

Later on, the company will reduce its capital by SAR 1.05 billion, so as to offset accumulated losses, proceed with the new business plan and enhance its fiscal position.

The chemicals producer had hired Aljazira Capital as financial advisor in January for the capital cut process, which was approved by the Saudi market regulator on April 20.

Nama incurred SAR 1.07 billion in accumulated losses in the period ended March 31, 2017, accounting for 83.6 percent of paid-in capital, Argaam reported.

The losses were attributed to a drop in production capacity over the previous years, fierce competition, the global economic slowdown, and customs tariffs in European markets. Therefore, the company cut the book value of assets by SAR 655 million.