SVCP shareholders approve 69.71% capital cut to offset losses
Saudi Vitrified Clay Pipes Company shareholders voted on October 22, 2026, to reduce its capital by 69.71% to absorb SAR 104.57 million in accumulated losses, according to a stock exchange filing reported by Mubasher.
Omar Al Nuaimi
Share cancellations and trading arrangements
The approved reduction will bring SVCP's capital down to SAR 45.42 million from SAR 150 million. The company will cancel 10.45 million shares, leaving 4.54 million outstanding instead of 15 million. Approximately 0.69714167 shares will be canceled for each share held.
The proposal won 87.29331% support from voting shareholders at the second extraordinary general meeting, which recorded attendance of 26.17%. The first meeting had fallen short of the required 26.12% threshold. Shareholders also voted to amend Articles 7 and 8 of the bylaws to reflect the revised capital structure.
SVCP said the capital cut would not affect its financial obligations, operations, or performance. It applies to shareholders on the Securities Depository Center's register at the close of the second trading day after the October 22 meeting.
The Capital Market Authority shareholders' circular sets out a two-trading-day suspension beginning the day after shareholder approval, followed by the resumption of trading at an adjusted price. Fractional shares are to be pooled and sold in the market, with eligible shareholders receiving the proceeds within 30 days of approval.
Rising losses led to a larger reduction
The board's initial recommendation, dated July 21, 2026, was for a 56.856% reduction to SAR 64,715,700 to offset SAR 85,284,300 in accumulated losses. As losses increased in the first half of 2026, the board revised the proposal on August 13 to a 69.714167% cut, leaving capital of SAR 45,428,750, according to the CMA circular.
SVCP filed its application with the Capital Market Authority on August 20 and received regulatory approval on September 7, ahead of the shareholder vote.
The circular puts accumulated losses at SAR 104,571,259 as of June 30, 2026, and says the reduction will leave a balance of SAR 9. Accumulated losses had risen from 10.1% of capital at the end of 2023 to 32.0% at the end of 2024, 53.9% at the end of 2025, and 69.7% on June 30, 2026.
SVCP's first-half 2026 net loss was SAR 23.6 million, compared with SAR 20.2 million a year earlier, according to Argaam. Its second-quarter loss totaled SAR 19.29 million.
Asset restructuring and a planned rights issue
SVCP has also taken steps to restructure its assets and improve liquidity. In 2025, it sold the assets of its second plant, which made vitrified clay pipes and fittings, and transferred the lease for the plant's land in a SAR 45 million transaction.
The company's growth strategy includes cement products through its Saudi Land Factory subsidiary, where production began gradually and sales started in 2024. The strategy also calls for completing a high-density plastic products factory. The company had expected that factory to begin production in the third quarter of 2026.
After completing the capital reduction, SVCP plans a SAR 90 million rights issue. The board recommended that capital increase on July 21, 2026, but it remains subject to approval from the Capital Market Authority and the extraordinary general assembly.
