TADCO Seeks CMA Nod for Capital Cut Plan

Tabuk Agricultural Development Co. (TADCO) submitted a capital reduction application to the Capital Market Authority on June 17. The proposal remains subject to shareholder approval, the company said in a filing.

The move comes as TADCO looks to restructure its balance sheet. A capital reduction typically allows a company to write off accumulated losses, return excess cash to shareholders, or streamline its equity base. The filing did not specify the size of the proposed reduction or the intended use of the freed capital.

TADCO, a Saudi agricultural firm focused on crop production and livestock, has faced margin pressure from rising input costs and water scarcity in the region. The company's last annual report showed net losses narrowing but still in negative territory, a pattern common among Saudi agri-players adjusting to the Kingdom's push for food security under Vision 2030.

Shareholders will vote on the proposal at an extraordinary general meeting, the date of which has not been set. CMA approval is a procedural step before the company can call the vote. If greenlit, the reduction would shrink TADCO's issued share capital, potentially boosting per-share metrics like earnings and book value for remaining holders.

The stock traded flat on the Saudi Exchange on the day of the announcement. TADCO shares have fallen roughly 12% year to date, underperforming the broader Tadawul All Share Index, which is down about 4% over the same period.

A capital reduction does not change the company's underlying operations or cash flow. For TADCO, the real test remains execution on its cost-cutting program and whether it can turn revenue growth into sustained profitability. The CMA filing is a governance step, not a turnaround signal.