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Savola Group announces the signing of a binding Sale and Purchase Agreement by its subsidiary Savola Foods Company for the sale of its entire businesses in Islamic Republic of Iran for an amount equivalent to SAR 705 million.
| Element List | Explanation |
|---|---|
| Introduction | Savola Group (“Group” or “Savola”) announces the signing of a binding Sale and Purchase Agreement by its fully owned subsidiary Savola Foods Company for the sale of its entire businesses in Islamic Republic of Iran (Iran) for an amount equivalent to SAR 705 million. |
| Transaction Details | On 31/12/2024 Savola Foods Company (wholly owned by the Savola Group), signed a binding Sale and Purchase Agreement with a Foreign Investor to sell its entire businesses in Iran for an amounts of SAR 705 million. |
| Transaction Amount | SAR 705 million |
| Transaction Conditions | The Transaction is subject to the completion of certain legal formalities and other regulatory approvals. |
| Parties of the Transaction | 1. Savola Foods Company, as Seller 2. A Foreign Investor, as Purchaser, which is not a related party |
| Date of Entering Into The Transaction | 2024-12-31 Corresponding to 1446-06-30 |
| Description of Activity of The Asset Subject of The Transaction | The Transaction includes Savola Foods Company’s entire businesses in Iran, which are engaged in manufacturing and distribution of edible oils, seafood, bakery and confectionary products. |
| Asset Book Value | The net book value (unaudited) of the businesses and investments in Iran as of 30 November 2024 amounted to SAR 656.5 million. |
| Financial Statements for the Last Three Years of the Asset forming the Subject Matter of the Transaction | Not Applicable |
| Transaction reasons | Savola’s divestment of its businesses in Iran comes in line with its ongoing prudent strategy to exit non-core markets. This decision reflects the Group's commitment to enhancing value and reallocating resources toward high-potential markets and growth-oriented investments in its food platform. The Group's exits from Morocco and Iraq in 2023 further underscore this strategic direction. |
| Expected Impact of the Transaction on the Company and Its Operations | • The difference between the Transaction Value and the book value of the operations in Iran, net of transaction costs, will result in an estimated gain amounting to SAR 2.8 million. • In addition, pursuant to International Financial Reporting Standards, the Transaction will also result in reclassification of foreign currency translation reserve (CTR) and effect of transactions with non-controlling interests without change in control, relating to investments in the Iran operations, amounting to SAR 1.3 billion and SAR 251 million, respectively, as at 30 November 2024, from equity to profit or loss, resulting to an estimated net loss amounting to SAR 1.6 billion on the transaction. |
| Details of Using The Proceeds of the Asset Sale | The Transaction proceeds will be utilized to strengthen the Group’s financial position. |
| Related Parties | There is no related party in this transaction. |
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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