The board of directors approved the start of procedures under the Kingdom’s bankruptcy law for Tihama Education, which holds a paid-up capital of SAR 200,000. The decision reflects the subsidiary’s liability burden exceeding its assets, triggering the move.
Tihama, listed on the Saudi Exchange, cites accumulated losses, non-payment to creditors and negative net assets as direct causes. For the first half of the fiscal year, it recorded losses of more than SAR 22 million, compared with SAR 6.9 million the previous year.
The liquidated unit, Tihama Education, was created in 2018 as a retail and educational development arm of the company, following a shift away from its traditional advertising-and-media services. Prior disclosures indicate that Tihama Education engaged in retail showrooms and airport outlets under the WH Smith brand, with a broader ambition to provide training and educational development services.
Industry analysts say this move underscores the broader pressure on media-and-marketing firms in the Kingdom to adapt rapidly amid shifting consumer behaviour and digital disruption. For Tihama, the capital reduction approved in October—the firm obtained regulatory clearance to cut its share capital from SAR 400 million to approximately SAR 229 million—had already signalled distress.
Examining Tihama’s financials shows a company confronting multiple headwinds. Its six-month loss of SAR 22 million and previous year full-year loss of SAR 11.6 million reflect both macro-economic pressures and sector-specific challenges, particularly in retail and education-services segments.
The company’s announcement makes clear that the liquidation of Tihama Education forms part of a corporate clean-up effort, aimed at containing risk and refocusing on core competencies in advertising, public relations and events. But it does raise questions about the viability of the wider business model and whether further restructuring is required.
Significantly, the subsidiary had a very limited capital base which suggests it was perhaps never a major contributor, but its liabilities and creditor defaults evidently triggered the board action. The board’s move to liquidate suggests that continuing operations were no longer viable under the bankruptcy law framework.
For investors and stakeholders the liquidation decision carries multiple implications: potential asset write-downs, impact on group solvency metrics, and reputational risk given the acknowledgment of liability-exceeding-assets status. Tihama’s share price had already been under pressure, with a 13.3 % decline over the previous twelve-month period.
From a governance perspective, the board’s decision to act ahead of a formal insolvency filing may reflect a proactive approach, yet the magnitude of losses and need for a capital reduction underline structural issues within the business. Analysts will be watching closely for further disclosures, especially any impact on other subsidiaries or operational units.
For the broader Saudi media and marketing sector the event underscores the risks of diversification into education and retail without sufficient scale or synergy. The Kingdom’s Vision 2030-driven growth in advertising and events remains strong, but margins are under pressure and firms with exposure to weaker segments may face increasing strain.
Tihama’s corporate strategy previously emphasised expansion into digital platforms, training services and retail, but current retrenchment suggests that macro-economic headwinds, changing consumer preferences and competitive pressures have combined to make certain segments untenable.
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