Emaar The Economic City Shareholders Approve Significant Capital Reduction

(MENAFN- The Arabian Post) Arabian Post -

Emaar The Economic City (EEC), the master developer behind Saudi Arabia's King Abdullah Economic City (KAEC), has secured shareholder approval for a substantial capital reduction aimed at extinguishing accumulated losses. During the Extraordinary General Meeting (EGM) held on December 31, 2024, shareholders endorsed the board's proposal to decrease the company's capital by 53.83%, reducing it from SAR 11.33 billion to SAR 5.23 billion.

This decision involves canceling 610.07 million shares, effectively eliminating 0.5383 shares for each share owned. The primary objective of this move is to offset accumulated losses amounting to SAR 6.1 billion as of September 30, 2024. The capital reduction will be effective for shareholders registered with the Securities Depository Center (Edaa) by the end of the second trading day following the EGM.

EEC has clarified that this capital reduction will not adversely affect the company's financial obligations. The company appointed KPMG Professional Services to prepare an accounting report detailing the reasons for the capital reduction and its impact on the company's liabilities. Based on KPMG's assessment, the reduction will have no negative effect on EEC's liabilities.

In line with this development, the Saudi Exchange has set fluctuation limits for EEC's share price to accommodate the capital reduction. Trading in the company's shares was suspended for two trading days starting January 1, 2025, with trading set to resume on January 5, 2025, at the adjusted price.

Emaar The Economic City is the developer of King Abdullah Economic City, one of the largest private sector projects in the Middle East. The city encompasses a diverse range of sectors, including industrial, residential, and commercial developments, and is a key component of Saudi Arabia's Vision 2030 initiative to diversify the economy and reduce dependence on oil revenues.

The capital reduction is part of EEC's strategic efforts to enhance financial stability and operational efficiency. By addressing accumulated losses, the company aims to improve its financial position and attract potential investors, thereby supporting the ongoing development of KAEC.

Shareholders and potential investors are advised to monitor further announcements from EEC regarding the implementation of the capital reduction and any subsequent strategic initiatives. The company's management has expressed commitment to transparency and will provide updates as necessary to ensure stakeholders are informed of progress and developments.

This move reflects a broader trend among companies in the region seeking to restructure capital to strengthen financial health and align with long-term strategic goals. Market analysts will be observing EEC's performance closely to assess the impact of the capital reduction on the company's financial metrics and market position.

Emaar The Economic City's leadership has reiterated its dedication to the successful development of King Abdullah Economic City, emphasizing that the capital reduction is a proactive measure to ensure the project's sustainability and contribution to Saudi Arabia's economic diversification efforts.

MENAFN02012025000152002308ID1109048814