Saudi Cable revokes financing agreement with Rawafed Al-Mustaqbal

Logo of Saudi Cable Co.

Saudi Cable Co. canceled an agreement with Rawafed Al-Mustaqbal Investment Co. to finance its working capital as the investor was unable to fulfill the agreement within the timeframe.

In a statement to Tadawul, the company illustrated that the agreement specified that the investor would deposit SAR 30 million into the company’s account before Oct. 26, 2023. However, the investor did not comply with this, paying only SAR 20 million five months after the agreed-upon date.

Under the deal, the investor was committed to purchasing raw materials worth SAR 110 million, to be paid before Oct. 26, 2023. The investor purchased materials worth SAR 4.86 million, and has not undertaken any other process to purchase materials to date, the statement added.

Additionally, the agreement specified that the debt would convert into shares at a nominal value of SAR 10 per share. This condition was included in the financial restructuring plan, which the company objected.

Saudi Cable stated that no authorization or decision from the previous board of directors was granted for whoever signed the agreement with the investor on behalf of the company. It neither granted the authority to sign the clause of capitalization at SAR 10, nor the ability to add other clauses included in the agreement against the interests of the company’s shareholders.

Furthermore, the Saudi-listed cable manufacturer’s previous management did not take the necessary procedures to protect the interests of the company and its shareholders and obligate the investor to pay the agreed amounts when due. This caused the loss of agreed supply contracts with some customers, and the company faced additional operational losses as a result of its commitment to supply contracts for other customers due to a plan based on the financing expected from the investor.

The company affirmed that it will take the necessary legal measures in accordance with the applicable regulations, which protect its rights and the interests of its shareholders.

According to the data available on Argaam, Saudi Cable signed a working capital financing agreement worth SAR 140 million with Rawafed Al-Mustaqbal, and it included cash financing and the purchase of raw materials to fulfill existing manufacturing orders.