Al-Khodari’s capital hike to boost growth, says CEO

Abdullah A. M. Al-Khodari Sons Co.’s (Al-Khodari) capital increase through debt conversion is a strong step that will help boost the firm forward, Fawwaz Al-Khodari, chief executive officer, told CNBC Arabia.

Al-Khodari has offered debt settlement to a number of companies. The firms included in the settlement account for 40 percent of Al-Khodari’s liabilities to suppliers, subcontractors and the holding company (major shareholder), he said.

“The ownership percentage of any shareholder will decrease, but that doesn’t mean they lost, as we the owners’ base will expand and increase both equity and capital. The target is to return to expansion and maximizing profits for partners,” the CEO said.

A detailed circular on the settlement will be published soon.

The capital increase will reduce Al-Khodari’s liabilities, raise financial solvency and ease the pressure on cash flow to be able to swing to growth by entering mega projects such as the Public Investment Fund’s (PIF) NEOM and Al-Qiddiya projects, he said.

Meanwhile, the firm will continue to get credit facilities, as lenders will have better views about the firm and will grant it bigger facilities after the process is done, he added.

The Capital Market Authority (CMA) has approved Al-Khodari’s request to increase its capital from SAR 557.81 million to SAR 1.02 billion through debt conversion, Argaam reported earlier.