Saudi Vitrified Clay Pipes Company has announced that it had submitted an application to the Capital Market Authority (CMA) seeking approval to reduce its share capital, as part of a proposed restructuring to offset accumulated losses.

Established in 1977 in Riyadh, the company is a leading manufacturer of vitrified clay pipes and fittings. The factory started with 24,000 tonnes annual capacity, reach 100,000 tonnes since 2001.

Under the proposal submitted on August 20, Saudi Vitrified Clay Pipes would be trimming its capital to SAR45.43 million ($12.11 million) from SAR150 million by cancelling 10.46 million ordinary shares, representing a reduction of SAR104.57 million.

The move is mainly aimed at offsetting an equivalent amount of accumulated losses, said the company in its filing to Saudi bourse Tadawul.

The application follows the Saudi Vitrified Clay Pipes' July 21 announcement regarding a board recommendation to reduce its capital and subsequently increase it through a rights issue. The company amended that recommendation in a subsequent announcement on August 16.

The proposed capital reduction remains subject to regulatory approvals, including approval by the company's extraordinary general assembly, it added.