Al Sorayai Trading and Industrial Group Co.’s board of directors has recommended a 40 percent capital reduction to SAR 225 million form SAR 375 million, to offset accumulated losses, the company said in a statement on Tadawul.

 

The capital cut is conditional upon obtaining regulatory approvals including the company’s general assembly.

 

Shareholders’ ownership ratios will remain unchanged after the capital cut, Al Sorayai added.

 

Earlier this year, the Saudi market regulator, the Capital Market Authority (CMA), said Tadawul-listed companies that have accumulated losses exceeding 50 percent of their capital will be forced into liquidation under a new corporate law, unless they fix their finances.

 

Capital reduction details

Current Capital

SAR 375 mln

Number of shares

37.5 mln shares

Capital cut percent

40%

New capital

SAR 225 mln

New number of shares

22.5 mln shares

Method of capital cut

Cancelling 15 mln shares

Reasons

To offset accumulated losses of 49.4% as of Sept. 30, 2017

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