Atheeb Telecom gets CMA nod for 60% capital cut

Saudi Arabia’s market regulator, the Capital Market Authority (CMA), has approved Etihad Atheeb Telecommunication Co.’s request to reduce capital by 60 percent to offset losses, the telecom operator said in a statement to Tadawul.

Last month, the company’s board of directors recommended reducing capital to SAR 630 million from SAR 1.6 billion, by cancelling 94.5 million shares from its current 157.5 million shares.

The company blamed its accumulating losses, which have exceeded its capital, on the use of outdated technologies— such as Wimax— in the past few years.

The capital cut will not have an impact on Atheeb’s liabilities, the telco said, adding that a financial advisor for the process will be announced at a later date.