Ibn Rushd shareholders approve capital cut to offset losses

Arabian Industrial Fibers Co.'s (Ibn Rushd) shareholders approved a capital reduction to SAR 2 billion from SAR 8.51 billion to partially offset accumulated losses, the Saudi Industrial Development Co. (SIDC), which is a shareholder in Ibn Rushd, said in a statement to Tadawul.

Ibn Rushd's SAR 43.8 million statutory reserve will be also used to offset accumulated losses.

Shareholders of Ibn Rushd gave the go-ahead for converting the firm’s legal status to a limited liability company, and authorized the board to take the necessary procedures.

SIDC added that it will reassess its investment in the company and disclose financial impacts, if any. SIDC owns a 1.56 percent stake, which is valued at SAR 132.9 million, in Ibn Rushd.

The company had earlier booked an impairment provision at 50 percent of the face value of its investment in Ibn Rushd for extraordinary losses.

Ibn Rushd is 48.07 percent owned by SABIC and 33.51 percent owned by the Public Investment Fund (PIF), according to data available on Argaam.

Saudi Pharmaceutical Industries & Medical Appliances Corporation (SPIMACO), Saudi Arabia Fertilizers Co. (SAFCO), Alujain Corp, and National Industrialization Co. (Tasnee) are also shareholders in the company.

Ibn Rushd's accumulated losses stood at SAR 1.08 billion at the end of 2016, accounting for 127 percent of total capital.