Tihama shareholders to vote on rescue for Saudi media group

WH Smith

• Meeting set for December 18
• Group runs WH Smith shops
• Tihama has reported heavy losses

Shareholders in the loss-making media group that operates WH Smith shops in Saudi Arabia are to vote on a rescue plan next month.

Tihama Advertising and Public Relations Company said its “financial reorganisation proposal under the Saudi bankruptcy rules” would be put to shareholders on December 18.

The meeting will be overseen by Osama Al Sudais, a reorganisation secretary appointed by the Commercial Court in Riyadh, and follows the court’s acceptance of the plan, according to a filing to the Saudi Stock Exchange.  

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In a financial restructuring 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. 

Shareholders approved the removal of the board earlier this month. Seven new members were appointed. 

Tihama has launched a lawsuit against some of the former board members, it said in a previous Tadawul filing.  

The company also told the exchange earlier this month that its results for the six months to September 30 would not be published on time.

In its latest quarterly results, for the three months to June 30, net losses had widened to SAR10.6 million, from losses of SAR7.1 million a year earlier.

The restructuring document states that the Covid pandemic 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 its investment proceeds.

“Given the liquidity constraints faced by the company, the majority of the company’s contracts were not renewed and therefore the number of contracts signed decreased significantly between 2022 and 2023,” it added.

Tihama said it had increased its capital to help pay creditors and provide cash for expansion.

“The company believes in its ability to implement the financial plan and fulfil its financial obligations, thus guaranteeing the rights of its creditors continuing as a going concern,” it said.

The proposal includes expanding its network of WH Smith shops at airports, developing its business distributing educational materials to Saudi schools, investing in a new media production company and increasing its number of billboard advertising sites.