Molan Steel updates loss restructuring plan after accumulated losses exceed capital

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Molan Steel loss restructuring

Highlights

Molan Steel's board approved a revised restructuring plan on 04/10/2026 to address accumulated losses and will submit it to the Extraordinary General Assembly.
Accumulated losses reached SAR 37,576,040 as of 30/06/2026, representing 141.26% of Molan Steel's SAR 26,600,000 capital, worsening from prior disclosures.
The updated plan phases aim to absorb losses, increase capital, and restore the share price above SAR 1, pending shareholder and regulatory approval.

Revised restructuring plan and legal basis

As reported by Saudi Exchange, Molan Steel says its board on 04/10/2026 approved an amended plan to address accumulated losses and restructure the company's finances, replacing the previously announced proposal. The recommendation will now be submitted to the Extraordinary General Assembly and remains subject to regulatory requirements.

The company links the move to a series of earlier disclosures in 2026, including its 29/04/2026 announcement that accumulated losses had reached 99.21% of capital, the 25/06/2026 board recommendations to address those losses, the 30/08/2026 withdrawal of its rights issue capital increase application to the Capital Market Authority, and the 06/09/2026 recommendation to amend the nominal value of the share. It also cites Article 132 of the Companies Law as part of the framework for the revised plan.

The updated plan is designed to absorb accumulated losses, increase capital and tackle the decline in the share price below SAR 1. The company says the restructuring will take place in several phases, with each phase requiring Extraordinary General Assembly approval.

Financial position and implications for shareholders

After reviewing interim condensed financial statements for the six-month period ended 30/06/2026, the board says accumulated losses stand at SAR 37,576,040. That represents 141.26% of the company's capital of SAR 26,600,000, indicating a deterioration from the previously disclosed level.

The revised proposal signals that Molan Steel is still seeking a route to stabilize its balance sheet after dropping the earlier rights issue path. For investors in the Saudi steel sector, the next steps hinge on shareholder approval, regulatory clearance and whether the phased restructuring can restore capital levels and support trading above the SAR 1 threshold.

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