Bawan Company announces that one of its subsidiaries sold its entire equity stake in United Technology Electric Company (Utec Algeria) for a value of SAR 30 Million approximately

Element List	Explanation
Introduction	Referring to the company's announcement on Tadawul website dated 08/03/1436 H corresponding to 30/12/2014 G, regarding the start of United Transformers Electric Company Ltd. (Utec Saudi) (a subsidiary owned indirectly by 85.5%) to establish and manage an industrial limited liabilities company in Algeria under the name of United Technology Electric Company (Utec Algeria) and also the announcement dated 04/05/1441 H corresponding to 30/12/2019 G, Bawan Company would like to announce to the stakeholders that Utec Saudi (the seller) has signed a shares sale contract with Industry Technology Electric Company (Algerian partner / the buyer) on 28/01/2021, to sell its entire 49% equity stake in Utec Algeria, with a value of USD 8.0 million (equivalent to SAR 30 Million approximately).
Transaction Details	Utec Saudi (the seller) will sell its entire 49% equity stake to Industry Technology Electric Company (the buyer) for a cash consideration of USD 8.0 million (equivalent to SAR 30 Million approximately).
Transaction Value	USD 8.0 million (equivalent to SAR 30 Million approximately).
Transaction Terms	The deal main conditions:

1-The completion of the deal is conditional by obtaining all regulatory approvals from the relevant authorities.

2-The two parties have agreed that the effective date of the shares sale contract will be 31/12/2020. Parties of the Transaction Utec Saudi (seller) and Industry Technology Electric Company (buyer). Transaction Funding Method Not Applicable. Transaction Execution Date 2021-01-28 Corresponding to 1442-06-15 Description of the Business of the Asset forming the Subject Matter of the Transaction Utec Algeria is engaged in the designing and manufacturing of various types and capacities of electrical transformers. Asset Book Value The net book value of Utec Algeria as of 12/31/2020 was SAR 25.8 million, including the direct loans granted from Utec Saudi by SAR 20.3 Million. Financial Statements for the Last Three Years of the Asset forming the Subject Matter of the Transaction Bawan Company share of the net losses of Utec Algeria was as follows:

2018: SAR 0.9 Million.

2019: SAR 1.5 Million.

2020: SAR 4.2 Million. Transaction reasons In line with the company's strategy to focus on investments that reduce any potential risks and maximize the stakeholders returns. Expected Impact of the Transaction on the Company and Its Operations The sale will generate a capital gain to Utec Saudi estimated to SAR 4.2 Million approximately. Bawan Company’s share will be SAR 3.6 Million approximately.

The total impact of this sale on Bawan Company will be a comprehensive profit by SAR 1.5 Million approximately after the closing of the foreign currency translation balance by SAR 2.1 Million approximately.

The financial impact is expected to appear during the first quarter of 2021. Details of Using The Proceeds of the Asset Sale The proceeds of this transaction will be used to enhance the cash flow and support the company’s operations and future plans. Related Parties Not Applicable. Additional Information Not Applicable.

The Capital Market Authority and Saudi Exchange take no responsibility for the contents of this disclosure, make no representations as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this disclosure, and the issuer accepts full responsibility for the accuracy of the information contained in it and confirms, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts or information the omission of which would make the disclosure misleading, incomplete or inaccurate.