Molan Steel Board Proposes Plan to Tackle 99.21% Accumulated Losses

Molan Steel Products Co. said its board of directors recommended a plan to address accumulated losses that have reached 99.21% of the company's capital. The announcement was made on June 25.

The accumulated losses have nearly wiped out the company's entire equity base. Under Saudi exchange rules, companies must take corrective action when accumulated losses exceed 50% of capital. The board did not disclose details of the proposed plan. Such restructurings typically involve a capital reduction to write off the losses, sometimes followed by a rights issue to raise fresh capital.

The board's recommendations require shareholder approval at a general meeting. A date for the vote has not been set. Molan Steel shares trade on the Saudi Stock Exchange.