Saudi media group Tihama to appeal against court ruling

Creative Commons/Ian Kirk

• Tihama has huge losses
• Company operates WH Smith
• Shareholders had backed plan

The company that operates WH Smith shops in Saudi Arabia is to appeal against a court ruling that blocks its financial rescue plan.

The Commercial Court in Riyadh rejected the proposal from media group Tihama on Monday.

Shareholders approved the financial restructuring plan recommended by Tihama’s board of directors last month. More than 99 percent of shareholders backed the proposal, which was compiled under Saudi bankruptcy rules.

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In a statement, the board told shareholders the ruling would “not affect the continuity of the company”.

In a document seen by AGBI, Tihama said more than 60 claims from its creditors – including suppliers, banks and employees – had been approved. These claims total nearly SAR59 million ($15.7 million). 

Tihama has advertising, entertainment and publishing businesses, as well as the WH Smith units at airports in Riyadh, Jeddah and the UAE.

Its accumulated losses stood at SAR119.8 million on June 30, which represents 30 percent of its capital. 

The document said the Covid pandemic had played a big part in Tihama’s troubles, leading to a “remarkable decrease” in sales and stores managed by the company, as well as a drop in investment proceeds.

The restructuring proposal turned down by the court included expanding its network of WH Smith shops at airports, developing its business distributing educational materials to Saudi schools, investing in a media production company and increasing its number of billboard advertising sites.

Separately, Tihama said it was still in talks with UK-based advertising company WPP Group to establish a venture in Saudi Arabia under the name ICG Saudi Arabia.

Both sides have agreed on an extension until June to complete the transfer of legal ownership and other regulatory approvals.