The board of Mobile Telecommunications Company Saudi Arabia (Zain Saudi), in its meeting on November 27, has recommended to shareholders to reduce the company's capital.
The board proposed decreasing capital by 45.96% from SAR 10,801,000,000 (1,080,100,000 shares), to SAR 5,837,291,750 (583,729,175); thus reducing 1 share for every 2.18 shares owned.
According to the company’s statement posted on Tadawul website, the main reason for the proposed capital reduction is to write-off all of the company accumulated losses up to 30 September 2014 representing approximately 45.96% of the Capital, as part of instituting its turnaround plan and pursuant to a recommendation by the Executive Management of the Company and its External Advisers.
The market value of the company will not change solely as a result of the capital reduction, although the number of shares held by each shareholder will reduce. Therefore, the market value of the shareholders shares will not change as the share price will be affected to reflect the capital reduction effect.