Tihama board member rebels as group’s losses exceed $37m

WH Smith

• Protest over court appeal
• ‘Significant doubts’ about future
• Losses are 35% of share capital

A board member at troubled Saudi Arabian media group Tihama has rebelled over the company’s decision not to appeal against a court ruling that blocks its rescue plan.

Sultan Abdul Latif Nuqli, a non-executive director, has filed a unilateral request to appeal against the Riyadh Commercial Court decision to reject Tihama’s restructuring proposal.

The move was revealed in a filing by the company to the Saudi Stock Exchange on Monday. Accumulated losses at Tihama had risen to more than SAR141 million ($37.6 million) by the end of 2023, representing 35 percent of share capital.

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The group, which operates WH Smith shops in Saudi Arabia and the UAE, said Nuqli’s appeal was considered an “individual action without any statutory powers or authorisation from the board of directors”.

“The company is taking legal measures in this regard to protect the company, its interests and shareholders,” it added in the Tadawul filing.

In a separate statement on Sunday, Tihama said it had made a net loss of SAR33.2 million in the nine months to the end of 2023.

A note from its auditor said a “fundamental uncertainty” remained, which may raise “significant doubts” about Tihama’s ability to remain a going concern. 

The note added that the company is working on restructuring some of its subsidiaries and expanding operations in the retail sector to increase revenues. 

“The group expects an improvement in its commercial activities and revenue growth over the next year, driven by the full operation of new branches in the retail sector, the development of operations in the distribution sector, and the austerity plans that have been initiated to raise the profit margin, especially in the production sector,” the auditor said.

Last month a group of shareholders who collectively own 10 percent of Tihama wrote to the company, calling for a vote to dismiss some board members.

In December, more than 99 percent of shareholders approved the financial restructuring plan recommended by Tihama’s board of directors, which was compiled under Saudi bankruptcy rules but rejected by the court.

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