Saudi Arabia-based steel producer Al Yamamah Steel Industries Co. announced that it will take part in the planned capital increase of its subsidiary, Al Yamamah Company for Reinforcing Steel Bars, following a formal request from the subsidiary’s board of directors. The subsidiary intends to raise its capital by SAR 300 million ($80 million), effectively doubling its current capital level, in order to proceed with its previously announced steel billet plant project.
According to the letter submitted to the Saudi Arabia Stock Exchange by the subsidiary, the capital increase will be executed through the issuance of 25 million rights issue shares, priced at SAR 12 per share.
After reviewing the request, the board of directors of Al Yamamah Steel Industries approved the subscription of 6.3 million rights issue shares. The total investment of SAR 75.6 million ($20.16 million) will be financed entirely through the parent company’s internal resources.
Following the capital increase, Al Yamamah Steel Industries’ ownership in the subsidiary will be adjusted to 51 percent, compared to the current 72.5 percent, reflecting the impact of the expanded share base. The capital raise and ownership structure changes remain subject to receiving all necessary regulatory approvals.
