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Building materials manufacturer Saudi Steel Pipe Company announced on Thursday the sale of the main operating assets of its troubled wholly owned subsidiary Titanium Steel & Manufacturing (TSM Arabia) for $9.7 million.
The firm has already entered into a definitive asset purchase agreement with Koch Chemical Technology Group Saudi Arabia Limited, to proceed with the transaction, a bourse filing to the Saudi Stock Exchange (Tadawul) said.
As of December 31, 2020, TSM Arabia’s accumulated losses had exceeded its share capital by 141.6 million ($37.8 million). The subsidiary is a maker of heat exchangers, pressure vessels and storage tanks.
The amount of TSM’s sale transaction, which is still subject to certain approvals, will be paid in cash on closing, the firm said.
“[The deal] is expected to close within the third quarter of 2021,” the statement said.
According to its financial results, Saudi Steel Pipe posted a net loss of 34.48 million riyals for the full year 2020, up from a net loss of 26.83 million in the previous year.
(Writing by Cleofe Maceda; editing by Seban Scaria)
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