Riyadh – Mubasher: The board of directors of the Saudi Paper Manufacturing Company (SPMC) recommended cutting the company’s capital by 39.2%.

The company’s capital is proposed to be slashed to SAR 149 million from SAR 245 million, according to a statement to the Saudi Stock Exchange (Tadawul) on Monday.

After the proposed reduction, the company’s shares will be decreased to 14.9 million from 24.500 million, the statement added.

The capital cut was proposed to restructure the company’s capital in a bid to offset the company's accumulated losses and foster future growth.

Such reduction will have no impact on the company’s liabilities, the statement noted.

The capital decrease is expected to take place at the end of the second trading day following the company’s extraordinary general meeting (EGM) which will make the final decision regarding the capital reduction.

The board also recommended raising the company’s capital following the capital reduction through a rights issue valued at SAR 150 million.

At the end of last June, the company’s accumulated losses reached SAR 96.08 million, representing 39.21% of the company’s capital which amounts to SAR 245 million.