Fitaihi Group inks SAR 14.4 mln MoU with Mohammed Fitaihi to sell Luxury Goods Trading

Fitaihi Holding Group signed a non-binding memorandum of understanding (MoU) with the executive board member, Mohammed Ahmed Hassan Fitaihi, to sell 80% of its stake in the subsidiary, Luxury Goods Trading Co. Ltd, worth SAR 14.36 million. 

Fitaihi is the company’s general manager and related party. He already owns 20% of the subsidiary, according to a bourse filing. 

The MoU will extend for six months from the signing date, as Fitaihi will pay a down payment of SAR 8.62 million, representing 60% of the total value, following the general assembly’s approval and contract signing. 

The remaining amount, worth SAR 5.74 million, will be paid through obtaining gold and jewelry merchandise selected by Fitaihi Group from Luxury Goods, at its fair value from the receiving date of selected merchandise. 

The financial impact of this deal will appear on the results of Fitaihi Group during the validation period. 

Fitaihi Group clarified that it incurred a loss of SAR 1.32 million as of April 30, 2020, from its share in Luxury Goods’ financial results. Similarly, it reported a loss of impairment in the investment value of SAR 4.69 million, which will be registered upon the general assembly’s approval and signing of sale contract. 

Luxury Goods reported a net loss of SAR 1.58 million in 2019, compared to SAR 3.26 million in 2018.  

In addition, Luxury Goods’ losses amounted to SAR 866,000 by the end of Q1 2020, compared to SAR 451,000 in the same period a year ago.