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The Saudi Paper Manufacturing Company announces the signing of an agreement to purchase the fifth production line with a production capacity of 60,000 tons of tissue paper rolls with the Italian company TOSCOTEC
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SPM
1.03
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1444/03/06 02/10/2022 08:11:35
| Element List | Explanation |
|---|---|
| Introduction | Referring to the announcement of the Saudi Paper Manufacturing Company published on the website of the Capital Market Authority (Tadawul) on June 5, 2022 regarding the signing of an agreement of understanding to purchase the fifth production line with a production capacity of 60,000 tons of tissue paper rolls with the Italian company TOSCOTEC, The company announces the signing of an agreement to manufacture and supply a production line for tissue paper rolls, based on the approval of the Board of Directors on September 17, 2022 as part of the project implementation. |
| Transaction Details | Manufacturing, supplying, installing and start up a production line for raw tissue paper rolls with a design production capacity of 60,000 tons annually. |
| Transaction Value | Equivalent to SAR 166 million. |
| Transaction Terms | Advance payment within a maximum period of two months from the date of signing the contract, and the rest in installments that correspond to delivery, installation, receipt and final operation. It extends from the date of signing up to a period of 16 months, and the company obtains a performance guarantee from the supplier according to the terms of the contract. |
| Parties of the Transaction | TOSCOTEC and Saudi Paper Manufacturing Company |
| Transaction Funding Method | The purchase of the machine for the new fifth production line will be financed through the company's operating revenues and the sale of some non-operating assets, in addition to the proceeds of legal claims for which judgments were issued in favor of the company, and part through banks and local financing agencies. |
| Transaction Execution Date | 2022-10-01 Corresponding to 1444-03-05 |
| Description of the Business of the Asset forming the Subject Matter of the Transaction | Produce tissue paper rolls from pulp with a production capacity of 60,000 tons per year, with the aim of increasing the company's production capacity. |
| Financial Statements for the Last Three Years of the Asset forming the Subject Matter of the Transaction | Not applicable |
| Transaction reasons | Increasing the company's production capacity of tissue paper rolls from 130,000 tons to 190,000 tons per year, to meet the requirements of the local market and increase exports |
| Expected Impact of the Transaction on the Company and Its Operations | The financial impact of this Transaction will be reflected on the plant and equipment as well as the obligations in the value of contract payments and in conjunction with their payment, and the financial impact of that transaction will start on the financial statements from the fourth quarter of 2022. |
| Related Parties | None |
| Additional Information | The agreement was signed with the Italian company Toscotec to provide the latest technologies and solutions for major tissue paper producers around the world, and Toscotec technology aims to achieve maximum production efficiency, reduce consumption, operating costs and final products with the highest quality and respect for the environment, and expected to start production during the third quarter of 2024, The value of the deal, which is the purchase of a machine with a value equivalent to SAR 166 million, is part of the value of the investments in the fifth production line, previously announced, with an approximate value of SAR 300 million. |
The Capital Market Authority and Saudi Exchange take no responsibility for the contents of this disclosure, make no representations as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this disclosure, and the issuer accepts full responsibility for the accuracy of the information contained in it and confirms, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts or information the omission of which would make the disclosure misleading, incomplete or inaccurate.
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