Raydan Food to cut capital 80%, pursue rights issue in Saudi Arabia
Raydan Food Company is moving ahead with a capital restructuring plan that sharply reduces its capital base before a proposed rights issue. The change is designed to write off accumulated losses of 58.5 million Saudi riyals and prepare the company to fund working capital and expansion plans.
Highlights
- Raydan Food will reduce capital by 80% from 73,136,030 to 14,627,206 Saudi riyals, lowering nominal share value from 10 to 2 Saudi riyals.
- The capital reduction targets elimination of 58,508,824 Saudi riyals in accumulated losses with the number of shares unchanged at 7,313,603.
- Following shareholder approval, Raydan Food plans a rights issue to fund working capital and expansion, contingent on Extraordinary General Meeting consent.
Capital restructuring plan and terms
As reported by Saudi Exchange, Raydan Food said on Oct. 1, 2026 that its board had resolved to amend its previous recommendation on reducing the company’s capital. The capital is set to fall from 73,136,030 Saudi riyals to 14,627,206 Saudi riyals, a reduction of 80%.The number of shares before and after the reduction remains unchanged at 7,313,603 common shares. Instead, the nominal value per share will be reduced from 10 Saudi riyals to 2 Saudi riyals. The company said the reduction is intended to restructure capital and eliminate accumulated losses amounting to 58,508,824 Saudi riyals.
The reduction will take effect at the end of the second trading day following the Extraordinary General Meeting that approves the transaction. Shareholders eligible to subscribe to the later rights issue will be those holding shares on the date of that meeting and registered in the company’s shareholder registry.
Funding goals and market implications
The planned capital increase through a rights issue is aimed at supporting Raydan Food’s working capital needs and expansion plans. The sequence of first reducing capital and then raising fresh funds is commonly used by listed companies seeking to clean up their balance sheets before bringing in new equity.For investors, the proposal links loss absorption with a future fundraising step that could reshape the company’s financial structure. The announcement also signals that shareholder approval at the Extraordinary General Meeting remains a key milestone before the capital reduction and any subsequent rights offering can proceed.
CIMB’s RM2 billion capital return plan and share buyback programme were previously covered in our publication, focusing on how the bank is balancing repurchases with special dividends. We also noted that the outcome is being watched as a wider signal for capital management across Malaysia’s banking sector, potentially influencing whether other major lenders adopt similar measures.
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