The proposed reallocation prioritizes near-term capital projects over acquisition opportunities
Middle East Paper Co. (MEPCO) said its board recommended, on Aug. 4, submitting a proposal to amend the use of the share issuance net proceeds in the upcoming general meeting, according to a statement to Tadawul. 
The proposal, if approved and implemented, would result in a variance of 5% or more between the actual use of the net proceeds and the planned use disclosed in the offering prospectus.
The proposed reallocation is intended to optimize the use of the net proceeds by prioritizing projects that are ready for execution and capable of delivering strategic and economic value in the near term, while maintaining the company’s long-term growth objectives.
The proposed reallocation reflects MEPCO’s current investment priorities in the absence of immediate acquisition opportunities, stressing that it does not represent a change in its mergers and acquisitions strategy. The company will continue to evaluate potential opportunities while preserving financial resilience.
MEPCO said the proposed reallocation would not affect the total net proceeds from the share issuance and is expected to enhance capital allocation efficiency, support its growth strategy, and maximize long-term shareholder value.
The implementation of the proposed reallocation is subject to shareholders’ approval, the statement said.
The proposed amendments to the use of the net proceeds are as follows:
Planned use of net proceeds (SAR mln)
Prospectus allocation
Proposed allocation
Difference
Reasons
Green Circular Co. containerboard mill project (PM5)
174.81
465.93
291.12
Finance the project using internal liquidity, reducing the need for debt financing and accelerating project execution.
Juthor Paper Manufacturing – second tissue production line (TM6)
153.98
153.98
—
No change.
Acquisition in the corrugated box sector
291.12
—
291.12
Reallocate the entire amount to the PM5 containerboard mill project due to the absence of immediate acquisition opportunities, while maintaining the company’s MA strategy.
Total
619.91
619.91
—
No change in total net proceeds.
According to Argaam data, MEPCO shareholders approved, in December 2023, a 30% capital increase to SAR 866.67 million through the issuance of 20 million new ordinary shares via a private placement.
The offering raised approximately SAR 630 million, fully subscribed by the Public Investment Fund (PIF), which increased its stake in MEPCO to 23.08%.
The proposed reallocation prioritizes near-term capital projects over acquisition opportunities
Middle East Paper Co. (MEPCO) said its board recommended, on Aug. 4, submitting a proposal to amend the use of the share issuance net proceeds in the upcoming general meeting, according to a statement to Tadawul.
The proposal, if approved and implemented, would result in a variance of 5% or more between the actual use of the net proceeds and the planned use disclosed in the offering prospectus.
The proposed reallocation is intended to optimize the use of the net proceeds by prioritizing projects that are ready for execution and capable of delivering strategic and economic value in the near term, while maintaining the company’s long-term growth objectives.
The proposed reallocation reflects MEPCO’s current investment priorities in the absence of immediate acquisition opportunities, stressing that it does not represent a change in its mergers and acquisitions strategy. The company will continue to evaluate potential opportunities while preserving financial resilience.
MEPCO said the proposed reallocation would not affect the total net proceeds from the share issuance and is expected to enhance capital allocation efficiency, support its growth strategy, and maximize long-term shareholder value.
The implementation of the proposed reallocation is subject to shareholders’ approval, the statement said.
The proposed amendments to the use of the net proceeds are as follows:
Planned use of net proceeds (SAR mln)
Prospectus allocation
Proposed allocation
Difference
Reasons
Green Circular Co. containerboard mill project (PM5)
174.81
465.93
291.12
Finance the project using internal liquidity, reducing the need for debt financing and accelerating project execution.
Juthor Paper Manufacturing – second tissue production line (TM6)
153.98
153.98
—
No change.
Acquisition in the corrugated box sector
291.12
—
291.12
Reallocate the entire amount to the PM5 containerboard mill project due to the absence of immediate acquisition opportunities, while maintaining the company’s MA strategy.
Total
619.91
619.91
—
No change in total net proceeds.
According to Argaam data, MEPCO shareholders approved, in December 2023, a 30% capital increase to SAR 866.67 million through the issuance of 20 million new ordinary shares via a private placement.
The offering raised approximately SAR 630 million, fully subscribed by the Public Investment Fund (PIF), which increased its stake in MEPCO to 23.08%.
