SISCO clarifies financial impact of selling its stake in RSGT

Logo of Saudi Industrial Services Co.

Saudi Industrial Services Co. (SISCO) announced an update on the financial impact of the sale of a 21.2% direct equity stake, together with the sale of a 4% equity stake, by 76%-owned subsidiary Saudi Trade and Export Development Co. Ltd. (LogiPoint) in SISCO’s subsidiary Red Sea Gateway Terminal Ltd. (RSGT), following the finalization of associated transaction costs.

According to a bourse statement, SISCO received a total gross consideration of SAR 556.5 million (before all transaction costs) for the divestment of its 21.2% equity stake in RSGT.

Meanwhile, LogiPoint received a total gross consideration of SAR 105 million for the divestment of its 4% equity stake in RSGT.

The transaction was treated as a non-adjusting event during Q2 2021 and a disclosure of the transaction and its accounting treatment was included in the notes to the Q2 2021 financial statements, according to the company.

Following the finalization of the transaction costs, the impact of the transaction on the Q3 2021 financial statements (subject to audit by the external auditors) is as follows:

- The transaction will only be recognized through the consolidated financial statement of financial position (balance sheet) and, therefore, no impact from the transaction will be recognized in the group’s Q3 2021 consolidated income statement

- The company also noted that combined unaudited net accounting impact of SAR 361.9 million (subject to audit by the external auditors) for both SISCO and LogiPoint transactions will be reflected in the equity in the group’s Q3 2021 consolidated financial statements.

- SISCO’s effective share in RSGT net income will be reduced from 60.6% to 36.36% in Q3 2021, the company said, adding that from an accounting perspective, SISCO will continue to consolidate RSGT.

In July, SISCO announced it concluded the sale of its 21.2% direct equity stake and 18.8% equity stake of other minority shareholders in its subsidiary RSGT, to the Public Investment Fund (PIF) and COSCO SHIPPING Ports Limited (CSPL), through its wholly-owned subsidiary, Sound Joyce Enterprises Limited, on a pro-rata basis for SAR 556.5 million, Argaam earlier reported.