Petro Rabigh Undergoes Capital Reduction Then Increase By Way Of Rights Issue

Rabigh Refining and Petrochemical Co. (Petro Rabigh) announced on Monday that the Company undergoes a capital reduction followed by a capital increase by way of a rights issue, with an aim to strengthen the Company’s financial position.

It said that this comes with reference to the announcement made by Rabigh Refining and Petrochemical Co. (the “Company”) on 31 December 2015 on the Saudi Exchange website regarding the Board’s recommendation to increase the capital by way of a rights issue with an amount of 9,259,000,000 SAR to accommodate the cost of the Rabigh Phase II Project, and after the Board has studied the financial position of the Company and took into consideration the accumulated losses which represent 13.76% of the Company’s capital as disclosed in the Company’s announcement dated 26 October 2021 on the Saudi Exchange website, the Company hereby announces the issuance of its Board resolution dated 6 December 2021G to amend the foregoing recommendation, so that the Company undergo a capital reduction followed by a capital increase by way of a rights issue, with an aim to strengthen the Company’s financial position, according to the following:

1) In relation to the capital reduction:

– The capital before the reduction: SAR 8,760,000,000.

– The capital after the reduction: SAR 7,554,897,000.

– The percentage of the reduction from the capital: 13.76 %.

– The number of shares prior to the reduction: 876,000,000 ordinary shares.

– The number of shares after the reduction: 755,489,700 ordinary shares.

– The method of capital reduction: Cancelling 120,510,300 ordinary shares, where one ordinary share will be cancelled for every (7.3) ordinary shares.

– Reasons of the reduction: to eliminate the accumulated losses.

– The impact of the capital reduction: The reduction will eliminate the accumulated losses, and the Company does not expect any negative material impact on its obligations, operations, or the Company’s financial, operational and organizational performance as a result of the capital reduction.

– The reduction date: the date of the reduction will be the end of the second trading day following the extraordinary general assembly that approves the reduction of the capital.

2) In relation to the rights issue:

– The recommendation to increase the Company’s capital through a rights issue with a total value of SAR 7,950,000,000 for the purpose of increasing equity and reducing liabilities.

– The eligibility will be for shareholders who own the shares on the day of the extraordinary general assembly that approves the capital increase through a rights issue, and whose names appear in the Company’s shareholders register with the Securities Depository Center Company (“Edaa”) at the closing of the second trading day following such extraordinary general assembly meeting.

It should be noted that the capital reduction and the capital increase by way of a rights issue are conditional on each other, as the approval of the extraordinary general assembly on both agenda items is required to undergo each of them.

Rabigh Refining and Petrochemical Co. (Petro Rabigh) announces the latest developments in relation to the recommendation of the board of directors to increase the Company’s capital by way of a rights issue

The Company is currently preparing the capital reduction application and the capital increase by way of a rights issue application. The Company will make an announcement once it submits the application to the Capital Market Authority for approval.

It is not possible for the Company to specify the expected date to complete the capital reduction and capital increase by way of a rights issue at this stage, given that both transactions are subject to regulatory approvals.

The costs associated with the capital reduction and capital increase through a rights issue will be disclosed in the capital reduction shareholders circular and in the rights issue prospectus.

The capital reduction and the rights issue are subject to the approval of the relevant regulatory authorities and the Company’s extraordinary general assembly as well as some lenders of the Company in accordance with the relevant financing documents.

It is planned that the substantial shareholders, Saudi Arabian Oil Company (Saudi Aramco) and Sumitomo Chemical Co. Ltd., will subscribe in their portion of the capital increase by way of capitalizing a portion of amounts owed to them by the Company. This structure is subject to regulatory approvals, most importantly the Capital Market Authority and the extraordinary general assembly of the Company. All relevant details will be disclosed in the prospectus, as required under applicable rules.

The Company has appointed HSBC Saudi Arabia as the financial adviser in relation to the capital increase through a rights issue, as announced by the Company on 28 December 2016 on the Saudi Exchange website, and also appointed HSBC Saudi Arabia as the financial adviser in relation to the capital reduction. The Company has also appointed Khoshaim & Associates as its legal advisor in connection with the transactions.

The Company is currently preparing the capital reduction application and the rights issue application. The Company will make an announcement once it submits the applications to the Capital Market Authority for approval.

The Company will announce any further material developments as required by the relevant rules and regulations.