Saudi Cable expects to break even in next 5 years: MD

Logo of Saudi Cable Co.

Saudi Cable Co. plans to reach the break-even point in the next five years and then turn to profit, said Managing Director Nael Fayez, expecting the cable producer to break even between Q4 2025 and Q1 2026.

Saudi Cable's strategic plan is based on three main pillars: First, its sustainability and continuity after the financial restructuring and until the next five years. Second, maximizing the value for shareholders by reducing debts and losses, heading to the break-even point in the next five years before turning to profit. Third, benefiting from conducting financial restructuring to reach an understanding with lenders, said the top executive.

He told CNBC Arabia that canceling the board of directors' capital reduction recommendation came because there was no need for that. He indicated that Saudi Cable’s exit from the financial restructuring procedure, the resumption of trading on its stock and the capital increase are sufficient to achieve its future aspirations.

There was no need to enter the financial restructuring procedure, but this happened due to some procedural errors, Fayez confirmed. He also revealed that the cable producer will clarify in the next court session, set to be held on Jan. 17, that it is able to continue to exist.

Moreover, the debt capitalization will take place largely by converting part of the debt into shares in Saudi Cable, after obtaining the approval of the regulatory authorities and its general assembly.

By the end of Q3 2022, Saudi Cable’s debt amounted to SAR 800 million and will be divided into three parts, the first of which amounts to between SAR 400-425 million, which can be capitalized and invested into the new capital.

The increase in the new capital is not only offering rights issue shares, but a large part of it will be debt capitalization, according to Fayez.

He added that the second part of Saudi Cable’s debts can be settled, reduced and rescheduled with current creditors, benefitting from the company's financial restructuring. Meanwhile, the third and final part can be settled with small creditors using the cable producer's frozen financial resources.

On Jan. 2, Saudi Cable announced that its application for opening the financial restructuring procedure was successfully registered, with Jeddah Commercial Court (the fourth circuit). The date of the first session was set on Jan. 17, according to Argaam's data.

The board of directors approved, on Jan. 2, scrapping capital reduction plans and proceeding with increasing capital to SAR 346.73 million, through a SAR 280 million rights issue.

Saudi Cable’s stock has been suspended from trading since May 8, 2022. It last closed at SAR 57.20.