Saudi Cable Co seeks more time to deliver rescue plan

Reuters/Kham

• Wants six-month extension
• Shares still suspended
• $37m working capital deal signed

Saudi Cable Company, which suspended trading in its shares earlier this month, has requested an extension to the deadline for submission of its financial restructuring proposal to the courts, as bosses scramble to finalise a rescue plan.

The company, which owns manufacturing facilities in Saudi Arabia, Bahrain and Turkey, said at the start of November that it was unable to publish its financial results for the first three quarters of 2023 on time because of “ongoing problems”.

In a filing to the Saudi Stock Exchange on Wednesday, the company has asked for an extra 180 days after conceding it would not be able to meet the original deadline of December 4.

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The request was made by Waleed Sobahi, a trustee appointed by the Jeddah-based manufacturer of power cables, to carry out the financial restructuring proposal.

In a ruling in June, the deadline was set down by the Fifth Appeal Chamber of the Commercial Court in Riyadh.

In the filing, Saudi Cable Company said it was continuing to work on its recovery plan “to ensure the continuity of the company and its operations”.

On Sunday, it announced the signing of a working capital financing agreement with Rawafid Al-Mustaqbal Investment Company amounting to SAR140 million ($37.3 million).

The company said the agreement includes cash financing and the purchase of raw materials to fulfill existing manufacturing orders. 

“The deal aims to help Saudi Cable increase its manufacturing capacity and maintain its relationship with one of its key strategic customers,” it said in a statement. 

Under the contract, Rawafid Al-Mustaqbal will deposit SAR30 million in cash into the company account before the end of the year, and will provide Saudi Cable Company with SAR110 million to purchase copper and aluminium. 

Rawafid Al-Mustaqbal said it aims to capitalise this loan later in exchange for shares in Saudi Cable Company after obtaining regulatory approvals.

Saudi Cable announced earlier this month that the procedure of appointing an external auditor was “in progress”, and that trading in its shares on Tadawul would be suspended as a result.

Its last published results for the first nine months of 2022 revealed a net loss of SAR116 million.

In June the company’s CEO, Nael Fayez, told the Saudi business website Argaam that the financial restructuring procedure will help the company “fulfill the rights of creditors and ensure the continuity of its business”.

He said the plan would include the capitalisation of some debt, as well as attracting new investments, raising capital and divesting other investments.

Saudi Cable Company was established in 1976 and was converted into a joint stock company in 1988 with a paid up capital of SAR270 million.