Takween scraps SAR 650M local sukuk program

Takween Advanced Industries Co. terminated its SAR 650 million local sukuk program, the company said in a regulatory filing. The program, denominated in Saudi riyals, was approved as a potential capital-raising tool. Takween gave no specific reason for the cancellation.

The move comes while the company works to restructure its finances. Takween defaulted on a separate sukuk in 2023 and has been in talks with creditors, according to public disclosures. The scrapped program would have provided fresh funds to address debt and working capital needs.

Packaging and plastics firms in Saudi Arabia have faced margin pressure from rising raw material costs and softer demand. Takween has reported losses in recent quarters. The cancellation removes a possible liquidity source, leaving the company more dependent on operations and creditor negotiations.

Takween shares have fallen sharply over the past year. The stock may face additional pressure as investors weigh the impact of the program's termination. The company's next earnings report, due in the third quarter, will show whether cash flow and restructuring efforts are gaining traction.

Takween has been selling non-core assets and trimming costs. The sukuk cancellation suggests market conditions or internal constraints made the offering unworkable. Without the program, the company has fewer options to raise debt. If operating cash flow does not improve, Takween may need to seek alternative financing or speed up asset sales.

The sudden cancellation also raises questions about Takween's access to capital markets. The program had not been utilized, based on available data. Creditors and shareholders will be watching for any update on a potential capital injection or a broader restructuring agreement.

Takween declined to comment further beyond the filing.