Logo of Saudi Paper Manufacturing Co.
Saudi Paper Manufacturing Co. (SPM) sold its entire stake in Moroccan Paper Manufacturing Co. (MPM) in Morocco for MAD 19 million (equivalent to SAR 7.33 million).
MPM is 100% owned by a subsidiary of SPM – Saudi Investment and Industrial Development Co.
In a statement to Tadawul, SPM said that the deal is subject to the usual conditions, in accordance with the rules, regulations and procedures followed in Morocco.
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The transaction involves Saudi Investment and Industrial Development as the seller, and businessman Omar Al-Nasi as the buyer.
MPM is a limited liability company based in Chichaoua. It operates in the field of manufacturing and selling paper processing products.
MPM’s book value is zero in SPM’s consolidated financial statements for Q2 2024, after an impairment in the value of assets, amounting to (SAR 13.6 million), which represents the balance of receivables as mentioned in the detailed clarification in the consolidated financial statements of SPM.
The transaction comes to strengthen the company's financial position, implement its strategy of exiting and liquidating non-operating foreign investments, improve the level of cash liquidity and focus investments on promising opportunities in the local market, the statement added.
The deal will have a positive impact on the consolidated financial statements of SPM of 2024 by realizing profits.
The proceeds from the transaction will be used for general corporate purposes, specifically repayment of a portion of the company's high-cost borrowings, the Saudi-listed firm noted.
The entire value of the investment in MPM was amortized in the 2020, after the company’s current management corrected the financial, legal and accounting conditions of the investment at the time. This was a result of a previous sale that took place in 2019, as a result of which control over the asset was lost and it was recovered in 2021 by a court ruling for the benefit of the company.
Developments in this regard were announced in earlier statements.
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