The Board of Directors of Al-Jouf Health Water Factory Company issued an important recommendation today to the Extraordinary General Assembly, to increase the company’s capital by 33%, in a strategic step aimed at strengthening the company’s financial solvency and supporting its future expansion plans in the Saudi Arabian market.
Details of the capital increase and bonus shares
In an official statement published on the Saudi Stock Exchange (Tadawul) website, the company revealed that this increase will be achieved by capitalizing approximately SAR 15.6 million from retained earnings. According to this recommendation, shareholders will receive one bonus share for every three shares held at the time of entitlement.
In numerical terms, the company's capital will increase from SAR 46.8 million before the increase to SAR 62.5 million after the transaction is completed. Concurrently, the number of shares will rise from 93,750,000 to 125,000,000, reflecting the company's desire to strengthen its equity base.
Expansion goals and economic context
Al-Jouf Water Company explained that the main motivations behind this decision are to support the company's growth and business expansion, as well as to strengthen its financial position. This move aligns with the economic activity witnessed in the Kingdom's food and beverage sector, where companies are seeking to increase their capital to ensure the availability of the necessary liquidity to finance new projects without excessive borrowing, especially in the current interest rate environment.
The bottled water sector in Saudi Arabia is a vital sector that is experiencing high competition and continuous growth, driven by population growth and changing consumption patterns, making the step of increasing capital a strategic necessity to maintain market share and develop production lines.
Date of entitlement and mechanism for dealing with fractions
The company has determined that the entitlement date for the bonus shares will be for shareholders who own shares at the end of trading on the day of the Extraordinary General Assembly meeting (which will be determined later), and who are registered in the company’s shareholder register at the Securities Depository Center (Edaa) at the end of the second trading day following the date of the assembly.
Regarding fractional shares that may result from the distribution process, the company confirmed that they will be collected into a single portfolio for all shareholders and sold at the market price, and then their value will be distributed to the eligible shareholders in proportion to their shares within a period not exceeding 30 days from the date of determining the shares due.
It should be noted that this recommendation remains conditional upon obtaining the necessary approvals from the competent official authorities, primarily the Capital Market Authority, in addition to the approval of the Extraordinary General Assembly of the company’s shareholders.
