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Bawan Co. announced on Monday the signing of an agreement to sell the entire share of Bawan Company in the Concrete Industries Sector, which in total represents (56.75%) of the company’s capital amounting to five million Saudi riyals, including its assets and liabilities, to Mr. Ahmed Muhammad Al-Osaimi, one of the current shareholders in the company, for a total value of SAR (76,700,000) seventy-six million and seven hundred thousand Saudi riyals.
The Company explained Today on Tadawul Provided that the full amount shall be paid in equal (24) monthly installments, which start from 01/08/2023, and the unpaid amounts of the sale price are subject to financial interest according to the prevailing commercial rates.
The parties agreed that the shares shall be sold based on the balances of the company’s reviewed financial statements on 30/06/2023, and that the approved effective date for the sale transaction for the accounting purposes shall be 01/07/2023.
• The parties agreed that the buyer would mortgage the shares being sold in favor of the seller (Bawan Company) and register the mortgage and publicize it in the competent government agency as a guarantee in favor of the seller.
• The obligation on the buyer, upon the date of signing, to provide a promissory note for the remaining amount of the value of the deal, legally signed by him in the name and for the benefit of the seller.
The book value of Bawan Company’s share in the company amount to 52 million Saudi riyals.
The revenues and profits/losses of the concrete industries sector in the last three years amounted to the following:
1- FY Year 2020:
Revenues: 177.9 million Saudi riyals.
Profits: 369 thousand Saudi riyals.
2- FY Year 2021:
Revenues: 175 million Saudi riyals.
Losses: (18.1) million Saudi riyals.
3- FY Year 2022:
Revenues: 267.6 million Saudi riyals.
Profits: 16.2 million Saudi riyals.
4- The first half of FY 2023:
Revenues: 95.2 million Saudi riyals.
Losses: (5.4) million Saudi riyals.
Transaction reasons: Since the concrete industries sector is not considered to have a fundamental impact on Bawan Company’s strategic plans and future expansions.
There is no material impact on Bawan company and its operations, as Bawan Company’s ownership in the concrete industries sector is the least compared to its ownership in other sectors. The deal will result in a capital gain of approximately 3 million Saudi riyals, in addition to the financial interest income calculated during the repayment period.
Details of Using the Proceeds of the Asset Sale are for Strengthening Bawan’s financial position and investing the proceeds in any available investment opportunity that is compatible with the Bawan’s strategy in the coming period.
It should be noted that on the date of signing the agreement, the total amounts paid by the buyer from the value of the deal amounted to 7 million Saudi riyals.