Saudi Cable clarifies canceling working capital financing deal

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Saudi Cable Co. received the last installment of the cash financing payment agreed upon with Rawafed Al-Mustaqbal Investment Co., which is estimated at SAR 10 million, after the check for the last payment was rejected the first time due to insufficient balance in the investor's account, the listed-firm said in a statement on Tadawul.

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The check was deposited in the company's account, after the availability of a balance in the account of Rawafed Al-Mustaqbal on May 30, 2024, after the date of the agreement cancellation.

The receipt of payment does not mean the continuation of the agreement, as the amount was deposited after the cancellation of the agreement.

The company will take legal measures to preserve the shareholders' rights and claim compensation for the damage suffered as a result of Rawafed Al-Mustaqbal’s back out of the deal to transfer the full amount on time.

There are no costs associated with the event now, and the financial impact, if any, will be disclosed later, the statement added.

According to data compiled by Argaam, Saudi Cable canceled the agreement with Rawafed Al-Mustaqbal to finance its working capital as the investor was unable to fulfill the agreement within the timeframe.

The company signed in November 2023 a working capital financing agreement worth SAR 140 million with Rawafed Al-Mustaqbal, and it included cash financing and the purchase of raw materials to fulfill existing manufacturing orders.

The agreement specified that the investor would deposit SAR 30 million into the company’s account before Oct. 26, 2023. However, the investor did not comply with this, paying only SAR 20 million five months after the agreed-upon date.

Under the deal, the investor was committed to purchasing raw materials worth SAR 110 million, to be paid before Oct. 26, 2023. The investor purchased materials worth SAR 4.86 million, and has not undertaken any other process to purchase materials to date.