Wafrah for Industry and Development Company said its accumulated losses reached 61% of the capital as of February 26, 2020, amounting to SAR 121.28 million.

 

The company clarified in a statement to Tadawul that the following reasons:

 

The main reasons

Higher Operating Income

SAR 81.89 mln

Investments Impairment Provisions

SAR 17.05 mln

Provision for Credit Losses (PCL) 

SAR 9.17 mln

Zakat Differences (2008 – 2011)

SAR 4.02 mln

Provision for Returns

SAR 1.09 mln

Provision for Loan Guarantee

SAR 8.06 mln

 

The company further noted that it will be subject to Capital Market Authority’s (CMA) regulations regarding companies with accumulated losses reaching 20% of capital or more, and companies with accumulated losses reaching 50% of capital or more.

 

Wafrah’s board of directors recommended to conduct the required procedures and comply with the relevant rules and regulations to preserve shareholders’ rights.

 

According to data compiled by Argaam, Wafrah’s board of directors recommended in Dec. 2019 cutting capital by 49.44% from SAR 200 million to SAR 101.12 million to offset the accumulated losses.

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