| Element List | Explanation |
|---|
| Introduction | Methanol Chemicals Company (Chemanol) announces the recommendation of its Board of Directors to the Extraordinary General Assembly to reduce the Company’s share capital with the aim of addressing its accumulated losses that reached 79.4% of the share capital. |
The recommendation follows the Board's recommendation issued on Wednesday 16/04/1447H, corresponding to 08/10/2025G.
The Board recommended submitting the capital reduction proposal to the Extraordinary General Assembly, as detailed below:
| Date of Board Meeting | 2025-10-08 Corresponding to 1447-04-16 |
| Capital before decrease | SAR 674,508,630 |
| Capital after decrease | SAR 150,000,000 |
| Percentage of Capital decrease | 77.8 % |
| Number of Shares before Decrease | 67450863 |
| Number of Shares after Decrease | 15000000 |
| Reasons for the Capital Decrease | Restructuring the Company's capital to write-off an amount of SAR 535,547,868 (Five hundred thirty-five million, five hundred forty-seven thousand, eight hundred sixty-eight Saudi Riyals) from the accumulated losses. |
| Method of Capital Decrease | Cancellation of 52,450,863 shares at a ratio of 77,8% share for each share. |
| Impact of the Capital Decrease on the Company's Obligations, Operations or Operational, Financial or Organizational Performance of the Company | There is no material Impact of the Capital Decrease on the Company's Obligations, Operations or Operational, Financial or Organizational Performance of the Company, and the ownership percentage of any shareholder will not change as a result of the capital reduction. |
| Date of reduction | The End of the Second Trading Day after the Extra Ordinary General Assembly Meeting in which Decrease was Resolved |
| Approvals | Reducing the capital is conditional on the approval of the official authorities and the extraordinary general assembly to reduce the capital. |
| Appointment of a Financial Advisor and the Submission of the Application for Capital Decrease to CMA | The Company appointed MEFIC Capital on 10/04/1447 H corresponding to 02/10/2025 as its Financial Advisor to manage the capital reduction process. The Company will announce the submission of the capital reduction application to the Capital Market Authority (CMA), as well as any further developments in compliance with the CMA’s rules. |
| Additional Information | It is worth noting that the Company will utilize an amount of SAR 11,039,238 from the Statutory Reserve (which represents 12.4% of the total reserve) to cover the remaining portion of 1.6% of the losses accumulated, in addition to the cancellation of the above-mentioned shares after obtaining all necessary regulatory approvals. |
Accordingly, capital reduction is a key step in the Company’s strategy to strengthen its financial position and enhance its operational and financial performance, thereby solidifying its foundation for future growth and maximizing value for shareholders.
It is also worth noting that the Company's accumulated losses have reached this level, mainly due to the following reasons:
- Recording losses resulting from a decline in the value of assets relating to the two companies acquired during the previous board period (Addar Chemicals Company and Global Company for Chemical Industries ), estimated at approximately 374 million Saudi riyals, in addition to 127 million Saudi riyals, due to the full write-off of the goodwill amount for the two companies.
- Financial results were also impacted by the ongoing operational losses of the group due to the prevailing market conditions.
The Capital Market Authority and Saudi Exchange take no responsibility for the contents of this disclosure, make no representations as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this disclosure, and the issuer accepts full responsibility for the accuracy of the information contained in it and confirms, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts or information the omission of which would make the disclosure misleading, incomplete or inaccurate.