Savola Group gains $21.6m from stakes sale to Taiba Investments Co.
Savola Group has announced gains of SR81 million ($21.6 million) from the sale of its stakes in Knowledge Economic City Co. and Knowledge Economic City Developers to Taiba Investments Co.
Taiba Investments inked a binding agreement to acquire Savola’s entire ownership in KEC and KECD for SR459.26 million in August, and the shareholders of both companies granted their approvals for the sale deal on Sept. 13 and Sept. 20, respectively.
With this deal, Taiba will increase its ownership in KEC from 3.2 percent to 9.6 percent and boost equity in KECD from 14.35 percent to 35.06 percent.
“It’s worth mentioning that the transaction has generated cash proceeds amounting to SR459 million, resulting in a gain of SR39 million that will be recorded in other comprehensive income and a gain of SR2 million that will be recorded in the statement of profit or loss in Q4 2022,” Savola Group said in a statement to Tadawul.
“The financial impact of the transaction will be reflected as an increase in the company’s investments in the consolidated balance sheet. It will positively impact the statement of income as expected revenue from the deal,” Taiba Investments Co. announced to the exchange.
The deal was supposed to be closed 120 days from the signing date on Nov.11, however, both companies extended the agreement by 60 days.
The General Authority for Competition cleared the sale transaction on Nov. 29, according to a bourse filing.
Savola Group reported a net profit after zakat and tax of SR648.3 million for the first nine months of 2022, an increase of 36 percent compared to SR476.2 million in the same period a year earlier.
The profit was driven by higher gross profit, improved margins in the food processing segment and higher profit share from associates, despite higher operating expenses and increased net finance cost.
Meanwhile, Knowledge Economic City widened net losses after zakat and tax to SR10.7 million in the first nine months of 2022, from SR2.6 million in the year-earlier period.
Taiba Investment Co., on the other hand, reported a net profit after zakat and tax of SR97.6 million for the first nine months of 2022, against a net loss of SR53.2 million in the same period a year earlier.