Theeb Rent a Car, a leading vehicle rental company in Saudi Arabia, announced a significant step reflecting its commitment to its shareholders' rights. The company revealed today that it has successfully deposited the proceeds from the sale of fractional shares into the bank accounts of eligible shareholders. This step finalizes the recently approved capital increase process.
In an official statement published on the Saudi Stock Exchange (Tadawul), the company clarified that the total proceeds from the sale of fractional shares amounted to approximately SAR 342,800. This sum resulted from the sale of 8,953 shares, with an average selling price of SAR 38.2 per share. The deposit process was executed efficiently in cooperation with Banque Saudi Fransi, which transferred the funds directly to shareholders' investment accounts, based on data provided by the Securities Depository Center Company (Edaa).
Background of capital increase
This process stems from the approval by the company's Extraordinary General Meeting, held in December 2023, of a capital increase through the issuance of bonus shares to shareholders. Increasing capital through bonus shares is a common financial instrument used by listed companies to strengthen their capital base and support their future expansion plans without imposing any additional financial burdens on shareholders, reflecting the company's strong financial position and confidence in its future growth.
What are fractional shares?
Fractional shares naturally arise during bonus share distributions. When the distribution ratio doesn't perfectly match the number of shares each shareholder holds, it results in fractions of a share. According to the regulations of the Saudi Stock Exchange (Tadawul), these fractions are aggregated and sold at the current market price. The cash value is then distributed to eligible shareholders according to their respective holdings. This procedure ensures the protection of minority investors' rights and guarantees they receive fair value for their shares.
Importance and impact on the market
This step is particularly significant as it underscores the transparency of Theeb's financial management and its commitment to implementing best practices in corporate governance. Locally, this process enhances investor confidence in the company and the Saudi market as a whole, demonstrating the efficiency of the financial market infrastructure, represented by Tadawul and Edaa, in smoothly facilitating complex financial procedures. Furthermore, the company's successful execution of its capital plans strengthens its competitive position in the rapidly growing car rental sector, aligning with the Kingdom's Vision 2030 goals for developing the tourism and logistics sectors. With this action, Theeb Rent a Car has successfully completed its capital increase, providing its shareholders with the necessary liquidity from fractional share proceeds.
