FILLING & PACKING MATERIAL. MFG. CO. (FIPCO) announces the Board’s Recommendation to Increase the Capital by Offering Right Issues
| ELEMENT LIST | EXPLANATION |
|---|---|
| Introduction | Filling and Packing materials MFG. Co. (FIPCO) announces that its Board of Directors has resolved in its meeting held on Monday evening , 20th of Rajab 1443 corresponding to Feb. 21, 2022, to recommend to the Extraordinary General Assembly to increase the Company’s capital through the issuance of rights issue according to the following details: |
| Date of Board Meeting | 2022-02-21 Corresponding to 1443-07-20 |
| Target Amount | SR 115,000,000 |
| Reasons for the increase | The capital increase aims to enable FIPCO and its subsidiary to keep pace with the 4G technologies for industries -one of the objectives of the Saudi Vision 2030 in industrial transformation programs aimed at raising the efficiency of Saudi factories through the following:
– Upgrading the production lines to increase the efficiency and achieve higher quality standards, leading to increasing the market share and export sales.
– Adding new products that give an added value to FIPCO diversity and wild spreading.
– Digitalizing the production lines to enhance efficiency through implementing the 4G technologies for industries. – Investing in sustainability initiatives, especially that relates to renewable energy, which saves energy expenses.
– Raising the financial solvency to support sales expansion, export sales in specific.
– Reducing borrowing and minimizing the banking charges and and providing sufficient working capital to meet the company’s expansion activities. |
| Eligibility date | Shareholders holding shares on the date of the Extraordinary General Assembly meeting in which capital increase through the issuance of right issues was resolved whose names so appear in the register of the Issuer’s Shareholders at the Depository Center at the end of the second trading day following the date of the General Assembly’s Meeting. |
| Approvals | Approval of the related official authorities and the Extraordinary General Assembly |
| Appointment of Financial Advisor and Submission of the Capital Increase Application File to CMA | Announcements will be made later upon appointing a financial advisor for offering, as well as upon submitting the request for capital increase to the Capital Market Authority for approval |
| Additional Information | – It’s worth to mention that FIPCO has been selected to join the National Industrial Development and Logistics Program (NIDLP)
– it’s also noteworthy that the annual salary expenses and energy cost in FIPCO amount to approximately 25% of the company’s annual revenues “according to the latest audited annual financial statements” which is a very large percentage that FIPCO aims to reduce by adopting the above-mentioned initiatives, as the most important challenges that FIPCO is currently facing the high employment numbers of more than 1000 employees based on the nature of operations, reaching the annual salary of SR 38 million, in addition to the cost of electrical energy amounted to SR 7 million annually. |