UAE's Gulf Cement AGM agrees 50% capital reduction

In Q3 results, auditors had said there was material uncertainty as to whether the company could continue as a going concern

Image used for illustrative purpose. Pouring concrete to the foundations of the building.

Image used for illustrative purpose. Pouring concrete to the foundations of the building.

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Gulf Cement PSC’s annual general meeting has approved the company’s 50 percent capital reduction after a bruising nine months, which has seen it record a comprehensive loss of $72.4 million so far this year.

The AGM approved the Ras Al Khaimah-based company’s capital reduction from AED 821 million to AED 410.5 by cancelling shares for the purpose of extinguishing accumulated losses as of September 30, 2020, it said in a statement to Boursa Kuwait.

The decision was approved by 98.45 percent of shares present, the company said.

The company’s Q3 reports, filed earlier this month, showed a comprehensive loss of AED 265.9 million ($72.4 million). Notes stated that the COVID-19 pandemic had materially and adversely affected the demand and selling prices for the company’s primary products, severely impacting operating results.

Despite auditors doubts about its ability to continue as a going concern, the company said in addition to lowering capex, it had sufficient internal and external sources of finance until performance metrics improved, which it said it expected to happen in the near future.

“The company is currently low-leveraged, and consequently management believe it is better placed to face off the headwinds as compared to its competitors,” the financial statement said.

(Writing by Imogen Lillywhite; editing by Seban Scaria)

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© ZAWYA 2020

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