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MedGulf to Wipe Out SAR 77.8M Loss With Share Premium
MedGulf proposes using SAR 224.97 million from its share premium account to offset SAR 77.82 million in accumulated losses. Shareholders also vote on related-party contracts with SAIB, Zain, and Qassim Cement.
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MedGulf will ask shareholders on June 29 to approve a SAR 224.97 million transfer from its share premium account to eliminate accumulated losses of SAR 77.82 million, the company said in a bourse filing. The move resets retained earnings without raising fresh capital or diluting existing holders.
The share premium account is a reserve built from capital raised above par value. Using it to offset losses is a structural fix, not a cash injection. MedGulf's accumulated losses had been eating into equity. Clearing the deficit through the premium account avoids a rights issue. The question for shareholders is whether the underwriting problems that caused the losses have been resolved.
The Extraordinary General Assembly will also vote on a slate of related-party contracts. Insurance policies with Saudi Investment Bank (SAIB) are valued at SAR 4.25 million. Claims management fees with Waseel for Electronic Information Transport Company total SAR 2.17 million. Other agreements cover coverage with Zain Saudi Arabia, Qassim Cement Company, and firms tied to Chairman Yasser Naghi and Vice Chairman Rakan Abu Nayyan. The board said none of the deals carried preferential terms.