Mobile Telecommunications Company Saudi Arabia (Zain KSA) has decided to cut its capital by nearly a quarter or 1.35 billion Saudi riyals ($360 million).
The move to reduce the capital from 5.8 billion riyals to approximately 4.5 billion is intended to write off the telecom firm’s accumulated losses, which were estimated to be at 1,444 million riyals as of June 30, 2020.
The company is 37 percent owned by Kuwait’s Zain Group. It had earlier said that it achieved “notable” financial results during the first six months of the year, with its net profit hitting 164 million riyals and revenues reaching 3,928 million.
The capital reduction, which had been recommended by the firm’s board of directors, was approved during the Extraordinary General Assembly.
As a result, some 135 million shares with a nominal value of 10 riyals per share will be cancelled and the number of shares will effectively drop from more than 583 million to 448,429,175, the company told the Saudi Stock Exchange (Tadawul).
“The reduction’s resolution shall be applicable [to] all the shareholders as registered in the company’s register at the Securities Depository Centre Company (Edaa) at the end of the second trading day after the extraordinary general assembly meeting during which the capital reduction was resolved,” the firm said.
The company assured that the move will have “no significant impact” on its financial obligations.
Zain Group’s consolidated revenue dipped slightly by 3 percent year-on-year to $2.6 billion during the first half of the year. Its net income dropped by 14 percent year-on-year to $273 million.
(Reporting by Cleofe Maceda; editing by Seban Scaria)
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