Riyadh – Mubasher: Raydan Food Company unveiled details about the board of directors' recommendation to reduce the firm's capital which will be followed by an increase in capital through a rights issue offering, according to a bourse disclosure.

Upon the latest update to its capital restructuring plans, Raydan Food plans a 70% reduction in share capital to address accumulated losses totaling SAR 51.19 million.

The board’s revised proposal involves lowering the company’s capital from SAR 73.13 million to SAR 21.94 million. This move is intended to be followed by a substantial capital increase of SAR 105 million through a rights issue offering to support the company’s future growth and operational stability.

Meanwhile, the number of outstanding shares will remain constant at 7.31 million; however, the reduction will be executed by adjusting the nominal value by lowering it from SAR 10 to SAR 3 per share.

The decision to amend the previous recommendation, which dates back to May 2025, follows an increase in accumulated losses as identified in the company’s interim condensed consolidated financial statements for the first quarter (Q1) of 2026.

During a board meeting held on 20 May 2026, directors determined that a more aggressive reduction was necessary to restructure the balance sheet.

Raydan Food emphasized that this accounting adjustment will have no material impact on its existing liabilities, daily operations, or overall financial and operational performance.

The reduction is slated to take effect at the close of the second trading day following the extraordinary general assembly meeting in which the resolution is approved.

Immediately following the completion of the capital reduction, the board recommended a capital hike through a rights issue worth SAR 105 million that is designed to provide the liquidity necessary for the company to execute its strategic expansion plans, bolster working capital, and strengthen its overall financial position.

The company noted that the rights issue is strictly contingent upon the shareholders’ approval of the initial capital reduction.

In a related administrative update, the board announced the appointment of Al Wasatah Al Maliah (Wasatah Capital) as the financial advisor for both the capital reduction and the rights issue processes.

This follows a previous announcement on 1 January 2026, regarding the cessation of Albilad Capital’s role as the financial advisor, lead manager, and underwriter for the capital increase.

The entire restructuring process remains subject to the necessary approvals from the Capital Market Authority (CMA) and other relevant regulatory bodies, as well as the final consent of the company’s shareholders during an extraordinary general assembly.

Raydan Food stated it will provide further updates to the market once the formal application files for the capital adjustments are submitted to the regulators.