Chemanol plans capital increase via SAR 674.51M rights issue

Logo of Methanol Chemicals Co. (Chemanol)

Methanol Chemicals Co. (Chemanol) said its board of directors on Feb. 13 recommended increasing the company's capital through a SAR 674.51 million rights issue.

In a statement to Tadawul, Chemanol said the capital increase would help finance and implement its business plans and future projects for expansions and growth, raise its levels of direct and indirect domestic investments, improve its financial solvency, and decrease borrowing rates and costs.

Chemanol recently obtained the Ministry of Energy’s approval for the allocation of natural gas for several projects, including the methanol expansion project to increase the current output by around 100,000 metric tons.

The company also received the approval for Chemanol’s new specialty chemicals complex to produce several strategic chemicals in Saudi Arabia.

The capital increase will contribute to reducing production costs and generate additional value for Chemanol. Furthermore, the above-mentioned projects align with Chemanol’s strategic growth plans to diversify and grow its business while serving the Kingdom’s chemical sector plans under Vision 2030.

Shareholders on the date of extraordinary general meeting (EGM) during which the capital increase is approved are eligible for the rights offering, along with, shareholders registered with Edaa at the end of the second trading day following the EGM.

A financial advisor will be appointed after all offers are studied, the statement said, noting that the proposal is subject to approvals from the related authorities and company shareholders.