The board of directors of Saudi National Metal Manufacturing and Casting Co (Maadaniyah) has recommended a capital restructuring via a 7.4 percent reduction in its capital, followed by a rights issue.

In a statement to Tadawul on Monday, the company said the capital would be reduced from 281.12 million Saudi riyals ($75 million) to 260.31 million riyals by writing off 2.08 million shares (1 share for every 13.51 shares)

In the meeting held on Sunday, the board also recommended a capital hike via a 120 million riyals rights issue following the capital cut.

The capital reduction is intended to restructure the company’s capital to write off the accumulated losses, Maadaniyah said.

Both moves are subject to approval by shareholders at an EGM and the Capital Markets Authority.

In a separate statement Sunday, Maadaniyah said it signed a six-month, renewable memorandum of understanding (MoU) with IGL Group to set up an aluminum foundry plant.

Maadaniyah is yet to report financial results for full-year 2020. In the nine-month period it narrowed net loss to 21 million riyals from 51 million riyals in the year-earlier period.

(Writing by Brinda Darasha; editing by Daniel Luiz)

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