Riyadh – Mubasher: The board of Middle East Paper Company (MEPCO) has recommended a significant reallocation of net proceeds from its previous capital increase, which raised SAR 629.99 million through the issuance of 19.99 million new ordinary shares.

The proposal, dated 4 August 2026, seeks to optimize capital allocation by prioritizing immediate strategic projects over long-term acquisition reserves.

The primary modification involves the Green Recycling Company (PM5) containerboard production plant. The board proposed increasing the allocation for this project from SAR 174.80 million to SAR 465.93 million, representing a 167% change.

This increase will be funded by reallocating the entire SAR 291.12 million originally earmarked for acquisitions in the corrugated carton sector.

Management stated the shift aims to utilize internal liquidity to accelerate project execution and minimize debt financing, noting a lack of immediate value-added acquisition opportunities.

Funding for the Juzoor tissue plant (TM6) remains unchanged at SAR 153.97 million. While the total planned utilization of SAR 619.90 million remains constant, the shift triggers a regulatory disclosure requirement due to a variance exceeding 5%.

Meanwhile, the proposal remains subject to approval at the upcoming general assembly.