Saudi Cable to resume full operations through capital hike proceeds: chairman

Saudi Cable Co. (SCC) will use its capital hike proceeds to resume plant operations and turn profitable going forward, rather than repaying debts or offsetting losses, chairman Meyassar Nowailati told CNBC Arabia.

“The capital hike will be complemented to ensure sufficient working capital and profitable projects,” Nowailati said.

The cable manufacturer implemented several reforms over the last 2 years, such as debt repayment, cost control and internal restructuring.

The capital increase is one of SCC’s key reforms, as it will help the company maintain its production capabilities through providing sufficient working capital or renovating its factory.

The move will also allow SCC to resume almost full operations and bid for various projects.

The Saudi or GCC markets are open, as projects worth hundreds of millions are always offered by power and water authorities and companies in the Gulf, he added.

Most of industrial companies’ projects require financing working capital through guarantees or allocations.

“Saudi Cable and other firms can only operate through banking facilities. When the company has a strong financial position, it will be able to sign bank agreements,” Nowailati concluded.

Saudi Cable kicked off on Jan. 6 a rights issue to raise its capital from SAR 110.6 million to SAR 360.6 million, aiming to restructure its capital and finance working capital to boost production capacity and support future activities.