Emaar EC gets CMA nod on capital cut by 53.8%

Logo of Emaar The Economic City Co. (Emaar EC)

The Capital Market Authority (CMA) approved Emaar The Economic City's (Emaar EC) request to reduce its capital from SAR 11.33 billion to SAR 5.23 billion.

Accordingly, shares will reduce from 1.13 billion to 523.26 million

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The approval is conditional on the company's extraordinary general assembly’s nod and completion of the necessary regulatory procedures.

Emaar EC will publish a disclosure document to its shareholders related to the proposed method of capital reduction and the expected effect of such reduction within sufficient time prior to the EGM to enable shareholders to vote on the capital decrease.

The CMA said its approval of a particular company's application to reduce its capital should never be viewed as an endorsement of the feasibility of the capital decrease, as it merely means that the regulatory requirements as per the Capital Market Law and its executive regulations have been met.

In September, Emaar EC’s board of directors recommended reducing capital by 49.69% from SAR 11.33 billion to SAR 5.70 billion. It decided, on Oct. 26, to amend its capital cut recommendation from 49.69% to 53.83%.

Emaar EC has announced its plan to restructure its financial position to move forward with its growth initiatives. The plan includes restructuring bank facilities, securing a loan from a new shareholder, reducing capital, and converting debt.