Shams gets CMA nod on capital hike via SAR 525.7 mln rights issue

Logo of Tourism Enterprise Co. (Shams)

Tourism Enterprise Co. (Shams) obtained the approval of the Capital Market Authority (CMA) to increase its capital through a rights issue worth SAR 525.7 million, according to a statement.

CMA also said eligibility for the rights issue shares will be to shareholders of record at the Securities Depository Center (Edaa) as of the closing of the second trading day after the extraordinary general meeting (EGM), which will be determined by the company's board of directors.

The offering price and the number of shares offered for subscription will be determined by Shams after market closing of the same day of the EGM meeting.

The rights issue prospectus will be posted and made available to the public at a later time.

On Feb. 15, the company's board of directors amended its recommendation for a capital raise from SAR 315 million to SAR 525 million via a rights issue, Argaam reported.

Shams aims to support working capital, enhance financial solvency, rehabilitate the current resort in the Eastern Province and invest in the tourism sector.

Last February, the company signed a non-binding memorandum of understanding (MoU) with SHUAA Capital Saudi Arabia to acquire three hotels in Riyadh, Jeddah and Dammam. The establishments are owned by the hospitality funds managed by SHUAA, at a total value of SAR 735 million. The deal was later extended to expire on Nov. 30, 2022.

In December 2021, the company's shareholders approved the board's recommendation on reducing capital by 48.21% to SAR 52.57 million, from SAR 101.5 million, according to Argaam’s data.

The CMA's approval of the prospectus should never be considered as a recommendation to participate in the offer nor invest in the Company's shares. The CMA's approval of the prospectus merely means that the legal requirements as per the Capital Market Law and its Implementing Regulations have been met.

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