Naseej recommends 43.4% capital cut, followed by SAR 150 mln rights issue

Naseej International Trading Co.’s board of directors recommended a 43.4% capital cut from SAR 178.16 million to SAR 100.76 million through writing off 7.74 million shares (1 share for every 2.302 share), during the extraordinary general meeting held today, Sept. 28.

The capital reduction is intended to offset SAR 77.4 million in accumulated losses as of June 30, 2020 and restructure the company’s capital, the company said in a bourse statement.

Meanwhile, the board of directors recommended a capital hike through SAR 150 million rights issue to be implemented following the capital cut.

The capital hike mainly aims at raising Naseej’s financial solvency, strategic expansion, improving financial performance, borrowing rates and the financing costs incurred, the statement added.

Eligibility will be to shareholders holding shares on the day of the extraordinary general meeting (EGM) that approves the capital hike including those registered at the Securities Depository Center (Edaa) at the end of the second trading day following the date of the EGM, the date of which will be determined later.

Both capital cut and capital hike are pending approvals of the general assembly and related regulatory approvals.

In January 2020, Naseej (previously Al Sorayai) approved a capital hike from SAR 65.5 million to SAR 178.16 million through issuing 11.27 million rights issue, according to data compiled by Argaam.