Saudi Arabian construction firm Abdullah Abdul Mohsin Al-Khodari and Sons said it aims to increase its capital by up to SR458 million ($122 million) to settle the amounts payable to the company vendors and its major shareholder Abdullah A M Al Khodari Sons Investment Holding Company.
 
The move comes following the recommendation of the Al Khodari's board of directors to the general assembly to boost the company's share capital by issuing new shares against the company liabilities.

Based on the negotiations with the company vendors and Abdullah A M Al-Khodari Sons Investment Holding Company, the parties have consented to subscribe to a capital hike against the settlement of all or part of the outstanding amounts due to them, said the company in a statement to the Saudi bourse Tadawul.

The company board made several key recommendations during its recent meeting to settle the company liabilities. These include the increasing of the company capital by up to SR250 million through new shares which will be issued to the company vendors.

The capital hike will be used to settle all or part of the amounts due to the company vendors concerned, said the top Saudi builder.

The company's board has also recommended to the Extraordinary General Assembly to boost the company capital by up to SR208 million instead of SR135 million, whereby the new shares will be issued against the settlement of debts owed to the Abdullah A M Al Khodari Sons Investment Holding Company.

All these steps are being taken to improve the liquidity position of the company, which in turn will provide a greater margin to cover commitments and reduce the leverage ratio, improving the position of the company and its future outlook, it added.

In another development, Al Khodari has signed an agreement with Abdullah Fouad Holding Company to conduct an auction of its surplus equipment from February 27 to March 1 at Al Khodari yard in Dammam, Saudi Arabia.-TradeArabia News Service