AYYAN partially divests WARAQ ownership for SAR 17.2M

AYYAN Investment Co. partially offloaded its ownership in the Arab Paper Manufacturing Company (WARAQ), on Dec. 15, to the Environmental Services Material Recycling Co. for SAR 17.23 million, according to a statement to Tadawul.

Under the deal, Environmental Services Material Recycling will acquire a 10% stake in WARAQ, and the latter will issue new shares to increase capital. Accordingly, Environmental Services would increase its WARAQ ownership to 35%.

AYYAN owned 2.13 million shares, or 4.7% of WARAQ before the sale deal. It sold a total of 693,666 shares for SAR 17.23 million. Accordingly, it now owns 1.44 million shares, or 2.31% of WARAQ after completing the deal and completing the capital increase process.

The investment’s book value recorded in AYYAN’s accounts reaches SAR 17.1 million as of December 31, 2023. The book value for the sold shares recorded in AYYAN's accounts was SAR 5.56 million as of December 31, 2023.

The investment is recognized in AYYAN’s accounts at fair value through comprehensive income. The value of this investment amounted to SAR 13.94 million as of December 31, 2021, and SAR 20.7 million as of December 31, 2022.

The deal aims to support financial position and enhance future growth plans, and it would further restructure the company's investment portfolio.

Based on the sale price of SAR 24.84 per share, the value of AYYAN’s remaining shares in WARAQ is SAR 35.8 million, or 2.31% of the company's capital.

AYYAN said it received a notice on Dec. 15 from WARAQ as regards completing the sale deal and transferring the ownership of the sold shares. The book value of the sold shares represents 1.1% of AYYAN’s net assets. There is no related financial impact on the company’s profit /loss statement.

WARAQ core business activities involve producing paper and cardboard rolls, marketing paper products, collecting and marketing paper and cardboard waste, in addition to wholesale and retail trade of materials, tools, equipment, and devices related to the paper industry.