The Almarai Company is seeking an increase in its share capital.

This follows the decision of the board of directors of Almarai Company at its meeting on Dec. 13, to recommend to an extraordinary general shareholders meeting (EGM) for its share capital increase, the company announced on Tadawul website.

The EGM is to be held along with the ordinary general assembly meeting in 2016 to discuss the proposed increase in the company’s share capital from SR6,000 million to SR8,000 million, an increase of 33 percent.

The number of issued shares is proposed to be increased from 600 million shares to 800 million shares.

The objective of this proposed share capital increase is to adjust the company's share capital to its assets level, and help support its investment program announced in May 26, 2015.

This program aims to increase the capacity expansion needs in all areas of Almarai’s integrated business model (farming, manufacturing, distribution and logistics), and address the investments required in product renovation and innovation.

The company expects to be in a stronger financial position to achieve its targeted continuous growth in all core business segments and geographic expansion.

This share capital increase should raise the operational efficiency, improve the utilization of available resources to support the company's growth and contribute to create appropriate jobs for the national manpower, the company stated.

Almarai has indicated that its share capital increase will be realized through the distribution of one bonus share for every three shares owned. This increase will be executed through the capitalization of SR2,000 million from its retained earnings account.

This proposed bonus share issuance will be limited to the shareholders who are registered in the shareholder's register on Tadawul at the close of trading on the EGM day, which will be determined later.

In the case of bonus share fractions, the company will collect them in one portfolio and then proceed with selling them over a period of 30 days to complete their allocation to all new shares.

The company also drew the attention of shareholders that issuance of bonus shares is subject to conditions, including the official approval and the EGM for increasing the company's capital.