To avoid write-offs, 4 listed companies recommend reducing their capital from 23% to 44% since the beginning of the year.

Four Saudi-listed companies have recommended a reduction of 23-44% since the beginning of the year 2019, with a total capital of 1.45 billion riyals after deduction of about 895.3 million riyals , against 2.35 billion riyals before the reduction.
Listed companies tend to reduce their capital to reduce accumulated losses, to avoid any cancellation by the system of Saudi stock companies, which also allows for a capital increase by subscription.
According to the monitoring unit of the newspaper "Economic" based on the financial statements of listed companies and Tadawul, one of the four companies recommended to reduce its capital, a company that has already reduced its capital four times and twice.
And companies that have been recommending to reduce their capital since the beginning of the year, according to the story of Abdullah Al-Khudari's sons, "Al-Khudari", who recommended a 39.8% reduction in his capital, passing from 557.8 million riyals to 335.8 million riyals, with a capital reduction of 222 million riyals.
The company announced in early February 2019 that the losses accumulated by the company amounted to 198.52% of the capital.
Amiantit, the second Arab company to reduce its capital by 44.53%, from 1,155 million to 640.6 million riyals, has amortized approximately 514.4 million rand of capital.
The company announced in February 2019 that its accumulated losses amounted to 44.53% of its capital prior to the reduction, and the company's management had recommended reducing its capital in order to eliminate cumulative losses.
And Al Ahlia Cooperative Insurance Co., which recommended reducing its capital by 23.13 percent by early March 2019. After approval of the reduction, the company's new capital rose to 123 million SR, against 160 million SR with a loss of 37 million SR.
According to the company's latest financial statements for the third quarter of 2018, accumulated losses amounted to 36.915 million riyals, or 23.1% of its capital, before the reduction.
This is the second time that the company has reduced its capital, it was already doing so in 2017. The General Assembly approved this reduction and the official authorities. The capital before the first reduction was 320 million riyals and reached 160 million. riyals with a radiation of 160 million riyals. Hundred.
Etihad Atheeb Telecom has decided to reduce its capital by 25.81%, to reduce it to 122 million SR, with a new capital of 350.5 million SR, against 472.5 million SR before the reduction.
The Company reduced capital to amortize accumulated losses of SAR 243.9 million as at March 31, 2019, a decrease of 51.63% due to lower operating income and other revenues, despite lower service costs and operating expenses.
This is the fourth time that the company has reduced its capital: in 2011, it was reduced by 60%, from 1 billion to 400 million riyals, from 1 billion to 40 million ryals to 60 million RS, then to 1575 million ryals. To 630 million riyals of 60%, or 945 million riyals.
In 2018, it decreased by 25%, from 630 million to 472.5 million RS. Fourthly, and finally in 2019, it was recommended to reduce the capital from 472.5 million RS to 350.5 million RS from 25.8%.
Accumulated losses are defined as a component of equity. When the company is created, the company adds its net income to shareholders' equity under "retained earnings" if the profits are realized and the accumulated losses are recognized.
Article 49 of Saudi Arabia's Articles of Association stipulates that if the cumulative losses of the joint-stock company reach half of its paid-up capital at any time of the year, any officer of the company or its commissioner must inform immediately the chairman of the board of directors and the chairman of the board. The Administration shall immediately inform the members of the Council.
The Board of Directors must, within 15 days of such notice, invite the Extraordinary General Assembly to meet within 45 days of the date on which it became aware of the losses, to decide whether to increase the capital of the Company, ie to reduce it in accordance with the provisions of the Companies Code, insofar as the loss ratio is less than half of the capital. Company paid or dissolved before the specified term.
The second paragraph of section 49 of the Business Corporations Act provides that if the General Assembly does not meet within the time period specified in the preceding paragraph, if it meets and is in the impossibility to make a decision on this subject or decides to increase the capital under the conditions provided for in this article, The subscription of each capital increase within 90 days following the publication of the decision to increase the amount of capital. Assembly, society is a big loser of the corporate system.

* Economic Reporting Unit