Sunday, Jan 21, 2007
RIYADH (Zawya Dow Jones)--Saudi-based Anaam International Holding Group's board of directors will meet Sunday to review the options to rescue the company from its current situation, the company's general manager Ahmad Bahefzullah told Dow Jones.
The Capital Markets Authority, or CMA, suspended trading in Anaam's shares Saturday due to a built-up in losses in the company's balance sheet.
CMA said in a statement the accumulated losses of Anaam could amount to about 95% of its capital.
Bahefzullah wouldn't elaborate on the options. But a company source said Anaam's chairman has proposed in a statement to the market regulator that the company will double its capital (currently at SAR1.2 billion), besides changing its activities to cover a wider range of investments in areas such energy, industry, finance and real estate.
The other choice on the board's desk is to liquidate the company, though Bahefzullah said this choice is unlikely.
The company's liquidation would mean using its assets to pay back the employees, lenders and shareholders.
"I would leave the comment on this subject to the chairman," Bahefzullah said.
Sunday's meeting will also look at Anaam's financial performance in 2006.
Analysts said the shareholders will not benefit from the liquidation, though the company has only 100 employees to pay for with but has currently about SAR30 million in cash reserves.
Bahefzullah said Anaam's assets include three fodder plants, a large agricultural area, besides other assets.
Still the shareholders won't be paid fully, analysts said.
Jameel Matar, regional manger at Emaar Financial Service, said the suspension of trading in Anaam shares came late.
"It's a step in the right direction, but this step should have been taken by the end of the third quarter of 2006," he said.
Mohammed Al Omran, a market analyst, said the suspension of trades in 120 million shares of Anaam will have a negative impact on the market's depth, and it may take the market a while to add this amount of shares by new initial public offerings.
The suspension of trading in two shares - Bishah Agriculture Development and Anaam - has added a downward pressure on speculative shares as traders anticipate similar steps in the near future, analysts said.
-By Anees Al Qudaihi, Dow Jones Newswires, +966 1 2914872, anees.alqudaihi@dowjones.com
Copyright (c) 2007 Dow Jones & Company, Inc.
(END) Dow Jones Newswires
21-01-07 1403GMT
