Capital increase by way of 9:1 rights issue priced at face value
DUBAI/December 07-2020: The shareholders’ meeting of Emirates Refreshments and subsidiaries (ERC), held on December 6 in Dubai, has decided to expand the share capital of the company by ten-fold, from AED30 million to AED300 million by way of rights issue.
ERC, which approved foreign ownership up to 49 per cent in the capital of the company, has also got the shareholders’ ratification to increase the company’s authorised capital to AED600 million in order to ensure room for expansion of its paid up capital in the future also.
Jeema trademark?
Another significant decision of ERC at the December 6 meeting was to transfer the trademark Jeema to another company. The company’s major businesses include bottling and selling of mineral water and evaporated milk, as well as manufacturing plastic bottles and containers.
9:1 rights issue
ERC currently has two plants located in Dibba and Hatta, in the UAE. An ERC statement explained that as part of the capital expansion planned by the company, new shares will be offered at AED1 each with an approximate ratio of 9 rights per share to the existing shareholders.
“Existing shareholders may also apply for the additionally issued new shares that may be allocated in the event of any portion of shares being unsubscribed either as a result of the consolidation of the unallocated fractional entitlements to new shares or the failure by owners of rights to exercise their rights in full,” the company said further.
Proceeds from rights issue
The company said it intends to use the net proceeds raised from the right issue to support future growth of the business of the company through expanding its business segments by acquiring companies that operate in different sectors, as well as to support its working capital needs.
The shareholders’ meeting also approved to endorse the board to enter new business activities such as investment in real estate, inside and outside the country; construction and facility management activities; investment in industrial and mining activities; investment in food industry businesses and in businesses specialised in livestock production and farming, etc.
Healthcare
The company will also explore opportunities of investment in healthcare activities. The accumulated losses of the company have reached AED8.74 million as of September 30, 2020, even as the current total equity at AED21.45 million has fallen below the paid-up capital.
The company that has been on a loss making streak for the past few quarters has reported a loss of AED4.5 million for the nine months ending September 30, 2020. The total assets of the company as at the close of Q3 was AED45.16 million as against AED51.78 million at the start of the financial year.
