Arabian Pipes recommends 75% capital cut, SAR 300 mln rights issue

Logo of Arabian Pipes

Arabian Pipes Co. announced that its board of directors, in a meeting held on June 8, 2021, recommended a capital decrease by 75% to SAR 100 million from SAR 400 million, to amortize accumulated losses, according to a bourse filing.

The board of directors also recommended that, after completing the capital decrease process, the company will increase its capital by 300% from SAR 100 million to SAR 400 million, through a rights issue worth SAR 300 million.

The capital hike is aimed at supporting working capital, strengthening the company's finances, reducing the borrowing rate, developing and modernizing the company's factories in Riyadh and Jubail, and expanding a number of products supporting pipe services within the business.

Shareholders of record on day of the extraordinary general assembly meeting (EGM), during which the capital hike is approved, are eligible. In addition, shareholders whose names appear in the company’s register at the end of the second trading day following the EGM are also eligible.

The date of the EGM will be determined later.

The board's recommendations will be submitted to the company's next EGM, and are also pending the approval of regulatory authorities.