Further to the announcement made by Savola Group (Savola) on 23 July 2014, regarding signing a non-binding memorandum of understanding (MoU) with Takween Advanced Industries (Takween) on 22 July 2014 in relation to the potential sale of its entire stake in Savola Packaging Systems Company, a wholly owned subsidiary of Savola (Transaction), as well as the supplementary announcement published on 6 November 2014, regarding the extension of the MoU till 31 December 2014.
Savola announces reaching an agreement with Takween after completion of a thorough due diligence exercise conducted by Takween and signing of an agreement on 30 December 2014 for the sale of its entire stake in Savola Packaging Systems Company at a total sale price of SAR 910 Million.
It worth mentioning, that the completion of the Transaction and payment of the said sale price remains subject to completion of a number of conditions before 31 March 2015 which also includes obtaining the consent of the concerned government agencies including, Council of Competition Protection and satisfaction of all legal and commercial conditions agreed between the two parties.
It is also noteworthy that there are no related-parties and/or any information or material terms that may influence the price.
Savola Packaging Systems Company is engaged in the production and sale of rigid and flexible plastic packaging and recorded net profits in the last three years (amounting to SAR 91.2 million for 2011, SAR 100.2 million for 2012 and SAR 69.5 million for 2013).
Savola is planning to utilize the proceeds generated from this transaction to support its core businesses (Foods and Retail) and adjacent activities. The key financial impact of this transaction is that Savola will record capital gain of SAR 265 million, which is expected to be reflected in the results of 2015 and the net assets of Savola will be reduced by approximately 5% after completion.
In this regard, Dr. Abdulraouf Mannaa, the Savola Group CEO & MD stated that this this transaction is indeed an affirmation of Savola strategy of focusing on growing its core sectors (Foods and Retail).
Savola will announce any further developments in this matter as they occur.
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