Shams amends capital cut recommendation to 48.2%, capital hike by SAR 315.4 mln rights issue

Logo of Tourism Enterprise Co.

Tourism Enterprise Co.'s (Shams) board of directors approved, today, Aug. 24, amending the recommendation on reducing capital by 48.21% to SAR 52.57 million, due to the losses incurred in Q2 2021.

In a bourse statement, the company said the board also decided to amend the capital increase through a rights issue at SAR 315.4 million, as follows:

The entire accumulated losses will be amortized, and there is no material impact from the capital reduction on the company's financial and operational obligations, or financial, operational or organizational performance, the statement added.

The capital reduction and increase are subject to the approval of the official authorities and the extraordinary general meeting.

The Tadawul-listed company is working with the financial advisor, AlJazira Capital, appointed on Sept. 17, 2019, to reduce and increase the capital, in accordance with the updated mechanisms to modify the capital reduction ratio from 34% to 48.21% and the consequent amendments in the agreement.

In September 2019, the board of directors has recommended a 20.5% capital reduction to SAR 80.69 million from SAR 101.5 million to restructure the company’s capital, offset accumulated losses and support future growth, according to data compiled by Argaam.

In April 2021, the company announced that the board of directors amended its capital cut recommendation to 34% from SAR 101.50 million to SAR 66.99 million.