RIYADH: Saudi construction firm Red Sea International Co. plans to raise SR280 million ($74.6 million) through a rights issue to support expansion, strengthen working capital and finance future projects.
The proposed capital increase, equivalent to 58 percent of the company’s current capital, was approved by the board and will be submitted to shareholders at an extraordinary general assembly, subject to regulatory approvals, according to a filing on the Saudi Exchange.
The fundraising comes as Red Sea International and its subsidiaries expand activity across Saudi Arabia’s infrastructure pipeline, supported by new project awards and partnerships linked to large-scale developments.
In February, one of its subsidiaries secured contracts for construction and electromechanical works in the Kingdom, including agreements linked to King Salman International Airport in Riyadh.
The awards underscore continued demand for construction and modular building services as Saudi Arabia accelerates projects tied to Vision 2030.
In the bourse filing, the company said the latest move is intended to “support the company’s future expansion plans, provide the necessary working capital to strengthen its financial position, and contribute to the financing and implementation of its future projects.”
The company also announced the appointment of Alinma Capital as financial adviser for the rights offering and for submitting the capital increase application to the Capital Market Authority.
In its latest filing, the company said shareholders holding shares on the date of the extraordinary general assembly meeting, whose names appear in the issuer’s shareholder register at the Securities Depository Center by the end of the second trading day following the meeting, will be eligible to participate in the rights issue.
The board’s recommendation remains subject to approval by relevant regulatory authorities as well as shareholders at the extraordinary general assembly meeting.
Red Sea International said a separate announcement will be made once the application file has been submitted to the regulator and as further developments occur.
According to the disclosure, the capital increase is also subject to a regulatory lock-up period of six months from the date of the company’s last capital increase, in line with Capital Market Authority regulations.
The board committed not to submit the capital increase application before the expiry of that regulatory period.
Source: www.arabnews.com