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Savola Group’s board of directors recommended reducing the company’s capital by 73.54% from SAR 11.33 billion to SAR 3 billion.
The reduction will involve canceling shares, with eligible shareholders compensated by receiving Almarai Co.’s shares at a fair value equal to the nominal value of the canceled shares, after adjusting the share fractions, if any.
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Capital Cut Details |
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Current Capital |
SAR 11.33 bln |
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Number of Shares |
1.13 bln |
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New Capital |
SAR 3 bln |
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New Number of Shares |
300 mln |
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Percentage Decrease |
73.54% |
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Reason |
The capital exceeds the company's needs; hence, the reduction will help distribute Savola’s entire stake in Almarai to eligible shareholders, which will improve the capital structure. |
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Date of Capital Reduction |
By the end of the second trading day following the EGM that will decide on the capital cut |
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Method |
Cancelling 833.98 million shares (73.54% of capital) and compensating eligible shareholders with Almarai shares at a fair value equal to the nominal value of the canceled shares, after adjusting the share fractions, if any. The number of Almarai shares will be set based on their market value at the record date of distribution. |
The remaining capital after reduction will be sufficient for the company's operational needs, according to a statement to Tadawul.
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.
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