Saudi Cable wins board approval for $92mln capital boost

Saudi Cable wins board approval for $92mln capital boost

Saudi Cable Company (SCC) has announced that its board of directors has recommended a slight reduction in the company's capital and then increase it considerably by offering priority rights shares. The transaction will involve transfer of 28 million shares.

A leading provider and manufacturer of total energy and telecommunications cable systems, SCC said following the hike, the company's capital will surge to SR347 million ($92.4 million) and its shares soar five-fold from 6.7 million to 34.6 million.

The move is mainly aimed at cutting the ratio of accumulated losses of the company to below 50% of its capital, said SCC in its filing to the Saudi bourse Tadawul.

This comes after several discussions with financial advisors and also the board's decision to cancel its previous recommendation to reduce the company's capital based on the developments, in negotiation with a number of investors to purchase some of the company's debts in exchange for converting them into ordinary shares at the nominal value, it stated.

The board's recommendation to increase capital by offering priority rights shares was to provide the liquidity necessary to expand operational processes, it added.

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