Riyadh – Mubasher: Nineteen Tadawul-listed companies have hiked their capital by SAR 12.57 billion during 2020, whereas eleven others lowered their capital meanwhile.
The capital hike processes were implemented by way of a rights issue, issuance of bonus share, or acquisitions, with the aim to expand the companies’ business size, raise growth rates, support capital base, or enhance resources.
According to a Mubasher analysis, the overall value of the capital hike transactions that were carried out via a rights issue surpassed SAR 6.061 billion.
Moreover, capital raise transactions implemented via issuance of bonus shares amounted to SAR 5.549 billion, mostly dominated by Alinma Bank, which issued SAR 5 billion worth of bonus shares.
Last April, the extraordinary general meeting (EGM) of Alinma Bank approved a capital raise by issuing one bonus share for every three original existing shares.
The bank's capital rose by 33.3% to SAR 20 billion from SAR 15 billion in a bid to enhance its resources to achieve good growth rates in the upcoming years.
In a similar move, the EGM of Mobile Telecommunication Company Saudi Arabia (Zain KSA) in October approved to raise the capital by 100.3% through rights issue trading. The company increased its capital to SAR 8.987 billion from SAR 4.487 billion.
In the meantime, the shareholders of Saudi Paper Manufacturing Company approved to raise the company’s capital by 108.7% or SAR 100 million to SAR 192 million from SAR 92 million by offering priority rights.
Eleven companies lower capital during 2020
On the other hand, eleven companies have cut their capital during the past year by SAR 2.9 billion to offset accumulated losses.
For example, the shareholders of Naseej International Trading Company approved reducing the company’s capital by 65.4% to amortise accumulated losses totalling SAR 116.5 million.
The company’s capital was cut to SAR 61.6 million from SAR 178.16 million through the cancellation of 11.65 million shares.