Riyadh – Mubasher: The shareholders of Abdulmohsen Alhokair Group for Tourism and Development gave the green light for reducing the capital to offset accumulated losses then increasing it to raise solvency and lower borrowing rates.

Alhokair Group will shrink the capital by 37.6% to SAR 343 million distributed over 34.3 million shares, compared with SAR 550 million and 55 million shares prior to the cut, according to a bourse filing on Sunday.

A total of 20.7 million shares will be cancelled by reducing one share for every 2.657 shares to offset SAR 207 million of the accumulated losses.

The shareholders also agreed to increase the capital through a rights issue worth SAR 307 million. The capital will stand at SAR 650 million distributed over 65 million shares after the hike.

The group will offer 30.7 million shares at a par value of SAR 10 each to carry out the capital raise.

In a separate disclosure, Alhokair Group said the rights issue and new shares subscription period will start on 26 July, with the former ending on 2 August and the latter on 5 August.

The Saudi Exchange (Tadawul) also announced in a separate filing that the fluctuation limit for the group will be based on a share price of SAR 24.12 and the outstanding orders will be cancelled.

Tadawul added that the rights will be deposited into the eligible investors’ portfolios on 13 July.

The Saudi Capital Market Authority (CMA) approved for the group to change its capital last June.