Riyadh – Mubasher: The Saudi Paper Manufacturing Co (SPMC) announced that its accumulated losses amounted to SAR 129.13 million, accounting for 52.7% of capital.

This comes as a result of the board of directors’ decision to amend and ease the value of the retrieved lands by SAR 33.052 million to its previously registered value prior to the sale transaction that took place in 2012, according to a filing to the Saudi Stock Exchange (Tadawul) on Monday.

However, this move will not impact the company’s operations or cash inflows and it is likely to contribute to the success of the current capital restructuring, SPMC said.

Moreover, the company has appointed Al-Sudais Certified Public Accountants to review and correct the accounting treatment related to all of the land sale and repurchase transactions and restrictions conducted during the years from 2012 to 2016.

SPMC is currently carrying out the restructuring processes to ease its accumulated losses as well as strengthen its financial position and improve its liquidity, which will be positively reflected on profit margins.

Furthermore, the company has appointed Wasatah Capital as a financial advisor on its capital cut and a planned capital increase, according to the filing.

On 16 September, SPMC said that its board of directors had recommended to a 39.2% capital cut to reduce the company’s capital to SAR 149 million from SAR 245 million to offset accumulated losses and guarantee future growth.

The board also proposed a capital increase following the capital reduction through a rights issue valued at SAR 150 million.