Astra subsidiary signs agreement to exit investment in Iraqi unit for SAR 731.2 mln

Logo of Astra Industrial Group

Astra Industrial Group announced that its 65%-owned subsidiary Al Tanmiya for Steel Industries signed, on Feb. 7, a conditional agreement with Alghad Almutkamel for General Trading, Iron and Steel Metallic Industries to exit its investment in the 100%-owned Al Anmaa Co. for Constructional Material Production Ltd., which owns steel and power plants in Iraq.

In a bourse statement, the company added that the ownership and management of Al Anmaa will remain with Al Tanmiya until the conclusion of the transaction and fulfillment of relevant conditions.

The transaction’s terms include obtaining all regulatory approvals in Iraq to conclude the deal, settlement of Al Tanmiya loans to Al Anmaa, receipt of proceeds from the sale of Al Anmaa shares by Al Tanmiya, registration by the regulatory agency of the shares in the name of the buyer. In addition, the buyer should secure the needed funding from Iraqi banks.

The book value of Al Tanmiya’s investment in Al Anmaa is negative $11.6 million (negative SAR 43.5 million). In addition, Al Tanmiya has outstanding loans of $134.6 million (SAR 504.7million) to Al Anmaa.

The amounts indicated in this clause are based on unaudited accounts of Al Tanmiya as of Dec. 31, 2021.

Al Anmaa’s financials for the past three years are based on audited accounts for 2019 and 2020 and unaudited statements for 2021, as follows: Losses of $6 million (SAR 22.5 million) in 2021; losses of $6.3 million (SAR 23.6 million) in 2020; and losses of $54 million (SAR 202.5 million) in 2019.

The deal aims to align the assets portfolio of the group and focus on growth aspiration.

The relevant financial impact on Astra will be determined upon completion of the transaction, in accordance with the appropriate accounting standards after considering taxes and other fees, given that this deal will be as per the accounting standards and regulations in Saudi, Iraq and Jordan.

The deal is dependent on meeting the abovementioned conditions and will likely be completed in H1 2021.

Proceeds from the transaction will be used to fund the company’s operations and growth.

Al Maseera International Co. owns 35% of Al Tanmiya. Sabih Masri, Khaled Masri and Ghassan Akeel - non-executive board members - have a direct and indirect interest in Al Maseeral.