Savola board proposes 73.5% capital cut

The reduction will not affect cash accounts or third-party obligations but will lead to distributing Savola's stake in Almarai to eligible shareholders. Accordingly, this will result in reducing Savola's share of Almarai's results and future dividends.

However, there will be no impact on liabilities or regulatory performance, the statement noted.

The capital cut is pending the approval of the competent authorities and the extraordinary general meeting (EGM). In addition, the move is subject to compliance with the creditors’ objection period in accordance with the regulations.

Savola appointed Riyad Capital as the financial advisor, and will reveal updates as regards filing for the approval of the Capital Market Authority (CMA).

In a separate statement, Savola announced the start of the creditors' objection period to object on the contemplated capital reduction, if any, in accordance with the relevant provisions of the Companies Law.

Accordingly, any creditors have the right to object to the capital cut through sending a registered letter and the supporting documents to the company.

The creditors' objection period will run 45 days starting Nov. 10, 2024.

Savola's board of directors recommended today distributing the company's entire 345.22 million shares in Almarai, representing 34.52% of the latter's capital, to eligible shareholders as an in-kind distribution.

In August, Savola increased its capital by 112.36% from SAR 5.34 billion to SAR 11.34 billion, via a SAR 6 billion rights issue. It offered 600 million ordinary shares at SAR 10 each.