Middle East Paper Co. Redirects SAR 291 Million Share Issue Proceeds to PM5 Containerboard Project

Middle East Paper Co. (MEPCO) shareholders have approved reallocating SAR 291.1 million from the net proceeds of a previous share issuance to the company’s Paper Machine 5 (PM5) project for containerboard production.

The funds had originally been earmarked for the acquisition of existing corrugated carton box manufacturing facilities. MEPCO said the reallocation is intended to optimize the use of proceeds and prioritize projects ready for implementation amid a lack of immediate acquisition opportunities, while the company continues to explore potential acquisitions.

Shareholders also approved additional fees of SAR 487,500 for Ernst & Young for additional audit work related to MEPCO’s 2025 annual financial statements, according to a statement to Tadawul.

MEPCO’s board had recommended the reallocation in August.

In December 2023, shareholders approved a 30% capital increase to SAR 866.67 million through the issuance of 20 million new ordinary shares with the suspension of pre-emptive rights. The issuance generated total subscription proceeds of approximately SAR 630 million.

The new shares were fully subscribed by Saudi Arabia’s Public Investment Fund (PIF), increasing its ownership stake in MEPCO to 23.08% of the company’s capital.