United International Holding Company (Tasheel), listed on the Saudi Stock Exchange, announced its board of directors' decision to amend its financing strategy for the company's planned capital increase. This move reflects confidence in the strength of its financial position and its capacity for organic growth. According to the official disclosure published on the Saudi Stock Exchange (Tadawul), the SAR 500 million increase will be fully financed through the capitalization of the statutory reserve and retained earnings accounts.
Background and Strategic Context:
This amendment comes as an update to the resolution announced by the Board of Directors on March 23, 2025, which recommended a substantial 200% increase in the company's capital, raising it from SAR 250 million to SAR 750 million. The primary objective of this increase is to strengthen the company's capital base and support its future expansion plans. The initial plan included utilizing three sources of funding: statutory reserves, retained earnings, and additional capital contributions. However, the new resolution eliminates the third source, relying solely on internal resources such as accumulated profits and reserves. This is a strong indicator of the company's positive financial performance and its ability to generate value from its operations.
The significance of this step and its anticipated
local impact demonstrate the sound financial management of Tasheel and its ability to finance its growth without requiring additional liquidity from shareholders. Capitalizing from profits and reserves is tantamount to distributing bonus shares to existing shareholders, each according to their ownership percentage, thus increasing their share count at no additional cost and enhancing the stock's market liquidity. This move also strengthens shareholder equity and bolsters the company's financial solvency, potentially improving its credit rating and facilitating access to future financing on more favorable terms.
Regionally, such decisions in the Saudi market reflect the maturity of listed companies and the strength of the Kingdom's economy, aligning with the goals of Vision 2030 to build a robust and sustainable private sector. The ability of companies to self-finance their expansions attracts both local and international investors, boosting their confidence in the Saudi business environment. This decision is expected to resonate positively with analysts and investors, who see it as evidence of operational efficiency and prudent resource management.
The next steps:
This decision remains merely a recommendation from the Board of Directors, as its final approval requires the consent of an Extraordinary General Meeting of Shareholders, the date of which will be determined later after obtaining the necessary regulatory approvals from the relevant authorities, primarily the Capital Market Authority. These procedures are an integral part of corporate governance, ensuring transparency and safeguarding the rights of all stakeholders.
