15-05-2025
Raydan's accumulated losses reach 53.74% of capital
Raydan Food Co. announced that its accumulated losses amounted to 53.74% of capital as of March 31, 2025.
In a statement to Tadawul, the company pointed out that the accumulated losses amounted to approximately SAR 84.95 million.
The increase in accumulated losses was attributed to a decline in sales and a reduction in revenue from contracts and franchise operations, as well as an increase in selling and marketing expenses, impairment losses on right-of-use assets and land (classified under property and equipment), as well as foreign currency translation losses.
The company also incurred losses from the revaluation of its investment in an associate company and recorded its share of that company's losses. Furthermore, the cost of revenue increased during the period.
To address the situation, Raydan outlined a number of measures it intends to implement. These include restructuring its service and operational segments, increasing sales at existing branches by diversifying menu offerings and focusing on delivery services through a comprehensive marketing plan, and enhancing revenues from its catering segment by entering into long-term strategic agreements.
The company also plans to reduce operating costs by consolidating its warehouses, slaughterhouses, and central kitchen. It aims to expand geographically into currently unserved areas through new catering contracts and branch openings, and restructure its franchise model with a focus on expansion outside Saudi Arabia.
Raydan stated that its board of directors will disclose its recommendations regarding the accumulated losses on July 13, 2025. An extraordinary general meeting will be called by no later than November 10, 2025, to vote on whether to continue the company's operations.
The company confirmed it will comply with the procedures and regulations set for listed companies whose accumulated losses exceed 20% of capital, and that the board has recommended taking all necessary actions in accordance with the laws applicable to companies with losses exceeding 50%. These include ensuring transparency, disclosure, and the protection of shareholder rights and interests.
Raydan also noted that the above dates are in line with Article 132 of the Companies Law, which requires that if a joint-stock company's losses reach 50% of its paid-up capital, the board must disclose this and announce its recommendations within 60 days of becoming aware. An extraordinary general assembly must then be held within 180 days to decide whether to continue operations or dissolve the company.
