Savola BOD recommends reducing the company’s capital by 73.54%

Savola Group “Savola” announced the recommendation of its Board of Directors to reduce its capital by an amount of 8,339,806,840 riyals, equivalent to 73.54% of the company’s capital, to become 3 billion riyals instead of 11.33 billion riyals.

The group explained in a statement on Tadawul that the reason for reducing the capital is due to its excess over the company’s needs and to facilitate the in-kind distribution of its entire share in the capital of Almarai Company to its eligible shareholders and improve the company’s capital structure.

It added that the reduction will include the process of canceling shares, followed by compensating the eligible shareholders by granting them a number of Almarai shares at a fair value equal to the nominal value of the canceled shares in the company, after adjusting the fractional shares, if any. After the reduction, the remaining capital will be sufficient to meet the company’s operational needs.

According to the group, the reduction method will be through the cancellation of 833,980,684 shares, equivalent to approximately 73.54% of Savola’s capital, by granting its eligible shareholders a number of Almarai shares at a fair value equal to the nominal value of the cancelled shares in the company, after adjusting the fractions of shares, if any. Note that the number of Almarai shares is determined based on the market value of those shares in Tadawul as of the actual due date for distribution.

It added, “The capital reduction will result in the distribution of Savola’s share in Almarai Company to the eligible Savola shareholders, which will lead to a reduction in Savola’s share of Almarai’s operating results as well as a reduction in the proceeds of profits that will be distributed in the future directly to the eligible Savola shareholders.”

The reduction date will be at the end of the second trading day following the Extraordinary General Assembly in which the capital reduction was approved.