Saudi Fisheries board proposes capital cut, rights issue

Saudi Fisheries Co.’s (Alasmak) board of directors on Wednesday recommended a 41.75 percent capital cut to around SAR 116.5 million from SAR 200 million to write off accumulated losses worth SAR 83.5 billion, the company said in a statement to Tadawul on Thursday.

The capital reduction will be carried out by writing off 8.35 million shares, with 5 shares to be cancelled for every 12 shares held. Following this, the total number of shares will be reduced to around 11.65 million shares from 20 million.

The capital cut will become effective at the end of the trading day following the extraordinary general meeting’s (EGM) approval. It will not have any impact on the shareholders’ percentage of ownership or the company’s operations and obligations, the statement said.

Following the capital cut, Saudi Fisheries plans to increase capital to SAR 300 million through a rights issue of SAR 183.5 million.

The rights issue will be offered to shareholders of record on the day of the EGM approving the rights issue, including those registered at the Securities Depository Center at the end of the second trading day following the meeting.

The capital re-structuring is expected to inject new funds that will be used in fulfilling obligations, and operating and developing projects, the statement added.

Both the capital cut and capital hike are subject to regulatory approvals.