Al Yamamah Steel's SAR 75.6M Capital Raise Dilutes Stake to 51%

Al Yamamah Steel Industries will inject SAR 75.6 million into its reinforcing steel bars subsidiary, subscribing to 6.3 million new shares at book value. The funds are allocated to a Phase II factory expansion, according to a filing on the Saudi Exchange (Tadawul).

The subsidiary, Al Yamamah Company for Reinforcing Steel Bars, is issuing 25 million shares to existing shareholders at SAR 12 each. The capital increase was approved by an extraordinary general assembly meeting. Al Yamamah Steel's subscription of 6.3 million shares will be paid from internal resources.

The parent's ownership will fall to 51% after the share issuance, down from 72.5%. The company said the pricing at book value is intended to strengthen the subsidiary's balance sheet as it embarks on the expansion. The capital increase remains subject to regulatory approvals.

The investment follows Al Yamamah Steel's win of a SAR 126 million contract to supply wind tower components for the Yanbu project. The Phase II expansion signals confidence in the rebar market, although the dilution reduces the parent's proportional claim on the subsidiary's future earnings. The Tadawul filing did not specify a timeline for regulatory clearances or the factory completion date.