Saudi Paper files claim to annul subsidiary sale in Morocco

Saudi Paper Manufacturing Co. (SPM) announced it signed a pledge in January 2019 to sell Moroccan Paper Converting, wholly owned by its subsidiary, Saudi Investment and Industrial Development.

The company said, in a bourse filing on Sunday, the Moroccan plant has been put under precautionary seizure, adding that an appeal to annul and suspend the sale procedures was also filed since the agreed amount to finalize the deal was not paid.

The sale amount does not exceed 10% of the company’s net assets at the time the contract was signed, it further explained, stressing that the board of directors will do their best to maintain shareholders’ rights.

The signed pledge falls within the company’s strategy to exit non-operating assets and take advantage of cash proceeds to secure the purchase of raw materials, in addition to operating SPM’s factories across the Kingdom at full capacity.

The company noted it will disclose any subsequent legal development in this regard.