Riyadh – Mubasher: The extraordinary general meeting (EGM) of City Cement Company approved the board’s proposal to reduce the company’s capital by 26% to SAR 1.4 billion from SAR 1.89 billion.
A total of 49.2 million of the company’s shares will be cancelled and a sum of SAR 10, which is the share’s par value, will be paid to eligible shareholders for every cancelled share as compensation, according to a bourse filing on Wednesday.
The new number of issued shares will amount to 140 million from 189.2 million.
Moreover, the cut will neither have any material impact on the company’s commitments and operations nor its financial or operational performance. However, the board expects this reduction to have a positive effect on the firm’s performance indicators and profitability.
The company intends to finance the capital cut through its internal resources. In the meantime, it previously signed two Sharia-compliant loan deals with Saudi British Bank (SABB) and Riyadh Bank worth SAR 50 million each for the same purpose.
The EGM decision is enforceable on all shareholders registered at the Securities Depository Center Company (Edaa) at the end of the second trading day following the creditor objection period.
Last month, the Capital Market Authority (CMA) approved the 26% capital cut.
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