Nama Chemicals eyes capital restructuring, sale of subsidiary

Nama Chemicals Co.’s board of directors has prepared a restructuring plan that includes a capital hike, a rights issue and sale of all or part of its subsidiary, Nama Industrial Investment Co.

The loss-making company, which makes caustic soda and epoxy resin, plans to reduce its capital to SAR 235.2 million from SAR 1.3 billion, it said in a statement to Tadawul on Thursday.

In April 2015, the board had recommended a capital increase through a rights issue to finance the production of specialized chemicals and increase the capacity of its factories. The board, along with legal and financial advisors, is currently studying the rights issue, the statement said.

The Jubail-based company also plans to sell its subsidiary Nama Industrial Investment, or part of its real estate assets to finance core operations, repay debts, or pay dividends, since real estate property is not central to the company’s activities, Nama Chemicals added.

The fully-owned Nama Industrial Investments is a limited liability company founded in 2007 in Jubail Industrial City to invest in petrochemicals, gas and oil projects, and develop and execute projects in the electrical, mechanical and industrial sectors. 

Nama Chemicals earlier in January said its net loss for 2016 reached SAR 837.2 million, compared with SAR 74.5 million net loss in 2015. Fourth-quarter losses alone widened to SAR 747.8 million.

By 2016-end, the company’s accumulated losses had reached SAR 1.07 billion, or 83.3 percent of the paid-up capital.