In continuation to the CMA's role in regulating and improving the Capital Market, the CMA has issued its Resolution regarding the procedures undertaken toward companies that apply for opening the Financial Reorganization Procedure.
The CMA Resolution specified the procedures that will be implemented on the listed companies (issuers) when submitting an application to the court for commencing a financial restructuring procedure set under the Bankruptcy Law issued by The Royal Decree number (M/50) dated 28/05/1439H and its Regulation issued by Council of Minister number (622) dated 24/12/1439H, and specified these procedures as follows:
- Trading of listed securities of an issuer with accumulated loss reaching 50% or more of its paid- in capital shall be suspended upon registering the application for the commencement of a financial restructuring procedure with the court in accordance with the Bankruptcy Law.
- The suspension of trading pursuant to paragraph (1) above shall be lifted upon the issuance of the court's decision ordering the commencement of the financial restructuring procedure for the issuer in accordance with the Bankruptcy Law, unless the issuer is banned from carrying out its activities by the relevant competent authority.
- The suspension of trading pursuant to paragraph (1) above shall continue if the court issues its decision rejecting the commencement of the financial restructuring procedure for the issuer in accordance with the Bankruptcy Law, until the expiry of the period specified in Article (150) of the Companies Law, or, prior to that, upon reduction of accumulated losses of the issuer to become below 50% of its paid- in capital.
- The issuer's securities will be delisted upon the issuance of the court decision terminating the financial restructuring procedure and commencing the liquidation or administrative liquidation procedure for the issuer in accordance with the Bankruptcy Law.
For more information, please click on the link below for the CMA announcement:
(The CMA Announcement)