According to the statement, the proposal to reduce the capital includes the abolition of 503 million and 274 thousand and 989 shares, which reduces the total current share capital by 43%.
This measure will allow the company to cancel the accumulated losses as mentioned in its most recent financial statements for the year ended December 31, 2019.
Julphar’s Board of Directors had recommended restructuring the capital in January, and called for a general assembly to approve the restructuring of the capital, to be followed by an increase in the capital by issuing subscription rights. In an effort to enhance the company's capital position and improve its debt profile, the issuance of subscription rights will increase the company's capital by up to 500 million dirhams by issuing new shares with a nominal value of one dirham, after canceling the company's losses.
Julphar's capital restructuring requires final approval from the Securities and Commodities Authority.
It is worth noting that after the comprehensive changes in Julphar’s Board of Directors and its executive management team in 2019, the company is implementing a comprehensive transformation program that includes plans to re-enter the Saudi and Kuwaiti markets, an expansion of its product portfolio, new investment in quality assurance systems, in addition to implementing an initiative to improve costs, and that In order to return to profitability and re-establish its leading position in the market.
In addition to the difficult market conditions, Julphar's operations in 2019 were affected by the temporary suspension of its exports to Saudi Arabia, Kuwait and Oman. The export of its products to Oman resumed in March 2020, while the company is awaiting the final results of the investigations conducted by the Health Council of the Gulf Cooperation Council states and the Food and Drug General Authority in Saudi Arabia, where it expects to lift the temporary ban on exports to Kuwait and Saudi Arabia at the appropriate time.
Dr. Essam Farouk, CEO of Julphar, said that the capital restructuring, which reflects the shareholders ’continued confidence and support for the company's commitment to provide high-quality, safe and effective products to customers, and the capital restructuring will be a milestone in the path of the company's transformation program, which It clearly aims to restore its leadership position as a pharmaceutical company with a prominent regional presence within three years.
He added: The re-launch of more than 80 products for the company in Oman recently confirms our commitment to serving all markets in the region. We will continue this path in the coming months and continue to focus on upgrading the quality assurance framework within the overall audit plan for our operating procedures and cost structure.
The Board of Directors will continue to inform the shareholders and the public of all developments of capital restructuring, and will announce the dates of the capital increase and the issuance of subscription rights, in addition to the terms and conditions of the issuance in a timely manner, including ...
