JEDDAH, 15 January 2007 — Bishah Agriculture Development Company (BADC) is seeking the approval of the Ministry of Commerce and Industry to hold an emergency meeting of its general assembly in order to discuss three options after the Capital Market Authority (CMA) suspended exchange of its shares on the Saudi bourse.
“We’ll present three options at the general assembly meeting: Liquidation of the company and its negative results; merger with a good company that has secured profits in three consecutive years; and increase of capital, using part of it to offset losses,” said Najmuddin Ahmed Dhafer, BADC’s chairman.
The CMA suspended exchange of BADC shares on Saturday after the company made financial losses worth SR22.3 million in the third quarter of last year. It said the losses that account for a big share of the company’s capital, would drastically affect its financial condition. The suspension, it added, would continue until the problems had been solved.
Dhafer hoped that BADC’s shareholders, who are estimated at nearly 10,000 people, would take a positive decision on the company’s future. “BADC has a liquid money of SR25 million in addition to assets and real estate properties. If the shareholders decide to dissolve the company, they should bear the losses to be caused by such a decision,” he told Al-Watan Arabic daily.
The chairman said he would not favor the option to dissolve the company. “A number of companies have offered to merge with them. They include Ajwa Food Industries. But the CMA has rejected our request to merge with Ajwa without giving a reason,” he said. Dhafer hoped that merging with a company that has been listed on the bourse would be a better option.
He said the company required SR200 million to strengthen its financial position and carry out strategic projects. “We’ll use the lion’s share of this capital increase to implement a large-scale poultry farm project to meet the needs of the southern region, and SR50 million to offset losses,” he explained.
According to the financial statement issued on Jan. 10, 2007, the company made a net loss of SR22.3 million by the end of Sept. 30, 2006. Bishah shares fluctuated heavily last week. Its shares fell 10 percent, the maximum limit, on Wednesday to SR69.75 after rising 7.69 percent to SR70 on Jan. 6.
Dhafer hoped that the general assembly would support the proposal to increase the capital and give its green signal to start the poultry farm project. “We have been planning to carry out this project for quite a long time. We have faced difficulty to receive a piece of land from the Ministry of Agriculture as a result of objections raised by tribes living in the area,” he added.
BADC currently owns three pieces of land with more than 8,000 palm trees and a date factory, he said, adding that they are situated in a good location. “The company has the capability to correct its course,” he said.
A Swiss company had estimated the value of the date factory at SR50 million 10 years ago. “Its value is now less than that amount as a result of consumption but its condition is excellent,” he pointed out.
