Saudi Clay Pipes Seeks 70% Capital Cut

Saudi Vitrified Clay Pipes Company has submitted an application to the Capital Market Authority to reduce its share capital by nearly 70% as part of a restructuring plan aimed at offsetting accumulated losses. The application was filed on 20 August 2026 and remains subject to regulatory and shareholder approval.

Under the request, the company would cut its capital from SAR 150,000,000 to SAR 45,428,750 by cancelling 10,457,125 ordinary shares. That represents a reduction of SAR 104,571,250, or about 69.7% of the existing capital. The stated purpose is to restructure capital and absorb accumulated losses of the same amount, with no reported material impact on liabilities, operations, or regulatory obligations.

The move follows an earlier board recommendation in July 2026 for a smaller cut to about SAR 64.72 million (56.86%). On 13 August 2026, the board amended its recommendation to the larger reduction in light of higher accumulated losses. The company has also maintained a plan to later raise capital through a rights issue, previously indicated at roughly SAR 80 million to SAR 90 million, which would require separate approvals, an application, and a prospectus.

What happens next

The reduction is not yet effective. It requires approval by the Capital Market Authority and by the company's extraordinary general assembly. Once approved, the company would coordinate with the Saudi Exchange (Tadawul) and the Securities Depository Center to cancel shares and adjust the number of shares and capital in shareholder accounts, alongside public disclosure of key dates such as the eligibility date and any trading halt.

For shareholders, this is a book-entry action on listed shares. It does not involve government service platforms; participation is through attendance and voting at the extraordinary general assembly.

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