The Extraordinary General Assembly of Al Hassan Ghazi Ibrahim Shaker Company (Shaker), in its second meeting held last Thursday via modern technology, approved the Board of Directors’ recommendation to increase the company’s capital by 22%, to reach 677.1 million riyals, in a step aimed at strengthening the company’s financial solvency and supporting its future expansion plans.
Details of the capital increase and bonus shares
According to the official statement issued by the company on the Saudi Stock Exchange (Tadawul) website, it was decided to increase the capital from SAR 555 million to SAR 677.1 million. This increase will be achieved by capitalizing SAR 122.1 million from retained earnings, which will raise the number of shares from 55.5 million to 67.71 million.
The capital increase mechanism involves issuing 12.21 million new shares, of which 11.1 million will be distributed as bonus shares to eligible shareholders at a rate of approximately 16.39%, or one bonus share for every five shares held. The remaining 1.11 million new shares have been allocated to the Employee Stock Exchange (ESE) program (Long-Term Incentive Plan).
Due date and how to handle fractions
The company clarified that the entitlement to bonus shares will be for shareholders who own shares at the close of trading on the day of the Extraordinary General Assembly meeting and are registered in the company's shareholder register at the Securities Depository Center at the end of the second trading day following the entitlement date. Regarding fractional shares, these will be consolidated into a single portfolio for all shareholders and sold at the market price, with the proceeds then distributed to eligible shareholders within a period not exceeding 30 days.
Context of the event and Shaker's position in the Saudi market
This move by Shaker, the exclusive agent and distributor for several prestigious global brands in home appliances and air conditioning (such as LG and Midea), reflects the strength of its financial position. Increasing capital through the issuance of bonus shares is considered a positive indicator in financial markets, as it typically suggests a company's desire to retain cash for reinvestment in operations rather than distributing it as dividends, thus enhancing its capacity for sustainable growth.
Other administrative and regulatory decisions
In addition to the financial aspects, the General Assembly approved authorizing the Board of Directors to manage and amend the employee stock ownership plan as needed, a modern approach adopted by major companies to enhance employee loyalty and link their interests to the company's financial performance. The resolutions also included approving the election of board member Khalid Al-Sulaygh to the newly created seat to complete the current board term, which ends in May 2029, as well as amending several articles of the company's Articles of Association to comply with new regulatory requirements.
