METHANOL CHEMICALS COMPANY ANNOUNCES ITS BOARD OF DIRECTORS RECOMMENDATION TO REDUCE THE COMPANY'S CAPITAL AND A SUBSEQUENT CAPITAL INCREASE THROUGH RIGHTS ISSUES
| Element List | Explanation |
|---|---|
| Introduction | Methanol Chemicals Company (Chemanol) announces that its Board Of Directors has decided in its meeting held on Sunday, 24-02-1442 Corresponding to 11-10-2020, to recommend to the Extraordinary General Assembly Meeting to reduce The Company's Capital and Subsequently increase the Capital according to the following details: |
| Date of Board Meeting | 2020-10-11 Corresponding to 1442-02-24 |
| Capital before decrease | 1,206,000,000 |
| Capital after decrease | 876,960,850 |
| Percentage of Capital decrease | 27.28 % |
| Number of Shares before Decrease | 120600000 |
| Number of Shares after Decrease | 87696085 |
| Reasons for the Capital Decrease | Restructuring the Company capital to write off the accumulated losses. |
| Method of Capital Decrease | By cancelling 32,903,915 shares, with one share to be cancelled for every 3.665 shares. |
| Impact of the Capital Decrease on the Company's Obligations, Operations or Operational, Financial or Organizational Performance of the Company | There is no impact of the capital reduction on the Company's financial obligations. |
| Date of reduction | The End of the Second Trading Day after the Extra Ordinary General Assembly Meeting in which Decrease was Resolved. such Meeting will be scheduled later. |
| Approvals | Capital reduction is subject to the approval of the related official authorities and the Extraordinary General Assembly. |
| Appointment of a Financial Advisor and the Submission of the Application for Capital Decrease to CMA | The Board of Directors has decided in the same meeting the appointment of Wasatah Capital as the financial advisor to manage the process of the capital reduction. The Company will announce filling the capital reduction request upon submitting it to the Capital Market Authority for approval,. |
| Additional Information | In the same meeting held on 24-02-1442 Corresponding to 11-10-2020, The Board of Directors has recommended to the Extraordinary General Assembly, and after finalizing the process of capital reduction, to increase the capital by offering Right Issues with value of SAR 480 million.
The approval of the Extraordinary General Assembly to the process of increasing the capital by offering Right Issues is conditional on the Company’s Extraordinary General Assembly approval of the proposed capital reduction. By increasing its capital, the Company aims essentially at raising its financial solvency and decreasing the borrowing rates and the costs incurred thereof. The eligibility of subscription will be for the shareholders who own shares on the date of the Extraordinary General Assembly meeting in which capital increase through the issuance of Right Issues resolved. Hence, such Shareholders whose names appear in the register of the Issuer's Shareholders at Edaa at the end of the second trading day following the date of the Extraordinary General Assembly's Meeting which will be scheduled later. We would also like to point out that process of the increase of capital is subject to the approval of the related official authorities and the Extraordinary General Assembly. As mentioned above, Wasatah Capital will be the financial advisor to manage the process of the capital increase. |
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