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Chemanol’s SAR 524M Capital Reduction: 78% Share Cancellation
Chemanol proposes canceling 52.45M shares to extinguish 90.76% of losses. EGM also votes on lawsuit against former board. Fractional share compensation mechanism to apply.
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Chemanol shareholders will vote on a capital reduction that shrinks the company's share count by 78% and cuts capital from SAR 674.5 million to SAR 150 million. The move aims to extinguish 90.76% of accumulated losses, the company said in a filing on the Saudi Stock Exchange (Tadawul).
The cancellation rate is 0.7776 for each ordinary share held. That means 52.45 million shares out of 67.45 million will be canceled. Holders who end up with fewer than four shares after the reduction receive cash compensation for the fractional portion.
The extraordinary general assembly (EGM) agenda includes other items. Shareholders will vote on transferring SAR 53.4 million from the statutory reserve to cover the remaining losses. They will also vote on authorizing a liability lawsuit against former board members from the 2021–2024 term who were named in a forensic investigation report.
The report, announced Dec. 7, 2025, focused on two acquisition transactions. The company said the lawsuit targets those who held direct or indirect executive powers and were included in the investigation. Separately, the board appointed Mr. Bassem Mohammed Bahloul as an independent member filling a vacant seat, effective Oct. 2, 2025, through Nov. 11, 2028.
Auditor fees are proposed to rise by SAR 421,126 over the amount approved at the June 2025 general assembly. The increase covers work related to the acquisition transactions, including a review of the forensic investigation report, asset impairment, cash flows, going-concern evaluation, and legal case reviews.
For shareholders, the capital reduction is meant to clean up the balance sheet after a period of heavy losses. The legal action against former directors introduces uncertainty about governance and potential liability. The compensation mechanism for fractional shares is defined in the proposal: cash payment for any remaining fraction after the cancellation.
If the capital reduction resolution passes at the EGM (this is the first session), the effective date will be for shareholders registered in the company’s register at Edaa at the end of the second trading day following the meeting. Shareholders registered on the Tadawulaty platform can vote remotely via the website.