CMA approves Chemanol’s capital cut, rights issue requests

Saudi Arabia’s Capital Market Authority (CMA) approved a request by Methanol Chemicals Co. (Chemanol) to reduce its capital to SAR 674.5 million from SAR 1.21 billion, the market regulator said in a statement on Thursday.

Accordingly, the number of shares will be reduced from 120.6 million to 67.5 million.

The CMA nod is conditional on the company’s extraordinary general meeting (EGM) approval and completion of necessary procedures.

In addition, the regulator approved Chemanol’s request to increase capital through a SAR 480 million rights issue.

The increase will be limited to the shareholders who arse registered in the shareholders registry at the Security Depository Center Co. (Edaa) as of the closing of the second trading day after the EGM, which will be determined by the board of directors at a later date.

The offering price and the number of shares offered for subscription will be determined after market closing of the same day, on which the EGM meeting is to be held.

According to data compiled by Argaam, Chemanol’s board of directors approved on Nov. 8, 2020, changing its recommendation on capital reduction to 44% from 27.3%.

The company turned to a net profit after Zakat and tax of SAR 29.9 million by the end of the first quarter of 2021, from net loss of SAR 28.6 million in year-earlier period.