Saudi Cable's debt settlement to absorb year-end losses, says chairman

Saudi Cable Co. (SCC) is likely to absorb potential investment losses in Q4 2018 backed by the SAR 203.8 million one-off gains expected from its recently-announced debt restructuring, the company's chairman Meyassar Nowailati told Argaam in an exclusive on Thursday.

A final settlement agreement was reached with two banks, while talks are ongoing with the third lender.

All creditors have shown interest in supporting the company to maintain its operations, instead of filing for bankruptcy.

"The SAR 314 million debt settlement agreement has given a top priority to the company and its shareholders' interest," Nowailati said.

The cable manufacturer will mostly repay the debt from selling its full stake in its Turkish wholly-owned subsidiary, Demirer Kablo. The remaining amount will be repaid from the company's available cash.

The board of directors had earlier adopted a rescue plan to end the company's financial crisis, which weighed on payment of liabilities to local banks amid weak market sales.

"The company has been heavily indebted for the last eight years. Its total debt exceeded SAR 1.8 billion. Total liabilities have been cut to SAR 560 million," he added.

The capital reduction to SAR 110 million from SAR 404 million will also help the cable manufacturer contain more losses.    

Meanwhile, Nowailati ruled out divestment of strategic investments, such as Midal Cables in Bahrain, despite market conditions, adding that the cable industry is promising in the neighboring markets.