Arabian Pipes Gets CMA Nod for 26% Bonus Share Issue

The Capital Market Authority approved Arabian Pipes Company's request to raise capital from SAR 200 million to SAR 252 million through a bonus share issue, the regulator said Thursday.

Shareholders will receive one bonus share for every four shares they hold. The company will fund the SAR 52 million increase by transferring that amount from retained earnings to capital. Outstanding shares will rise to 252 million from 200 million.

The record date will be set later by the board, defined as the close of the second trading day after a yet-to-be-announced due date. An extraordinary general assembly must convene within six months of the approval. The company must also satisfy all remaining regulatory requirements.

Bonus issues do not raise new cash for the company. They increase the share count and reduce the per-share price proportionally, leaving market capitalisation unchanged. For Arabian Pipes, the 26% increase in shares will dilute earnings per share by the same factor unless net income rises to offset it.

The approval follows a period of capacity expansion at the Riyadh-based pipe manufacturer. The company produces steel pipes for oil, gas, water, and construction sectors across the Middle East and North Africa. Its last annual report showed revenue growth driven by higher project awards in Saudi Arabia's infrastructure and energy programmes.

Shareholders will vote on the issue at the EGM. The stock closed Thursday at SAR 78.50 on the Saudi Exchange, up 1.2% on the session.