Saudi Chemical to transfer explosives business to subsidiary

Saudi Chemical Co.’s board of directors recommended on Sunday to transfer the explosives business to its wholly-owned subsidiary Saudi Chemical Company Limited, the firm said in a statement to Tadawul.

The move aims to lift the risk concerning the explosives segment off the mother company and restrict it only to the subsidiary, the statement said.

The change will not have any financial impact on Saudi Chemical, as it will take place according to book value, under the following procedures:

1) All the departments related to the explosives segment will be transferred to the subsidiary.

2) All related sites and plants, including assets will be transferred to the subsidiary.

3) All employees working in the explosives sector will be transferred along with their financials. The firm will sign new employment contracts with them, as it is obligated to fulfill all their due payments, taking into account their tenure since they joined the mother company.

4) All related licenses will be under the subsidiary’s name.

After obtaining shareholders and regulatory approvals, the decision will come into effect as of Jan. 1, 2019, the statement said.

Any developments will be disclosed as they occur, it added.

Saudi Chemical’s Q2 2018 net profit was hurt by the weak performance of its explosives segment, which posted a 37 percent year-on-year (YoY) drop in net income to SAR 7.9 million, Argaam previously reported.