Astra says accumulated losses of Iraq’s Al Tanmiya Steel hit SAR 1.36 bln

Astra Industrial Group said that accumulated losses of its joint venture, Al Tanmiya for Steel Industries Co.- Iraq, crossed 100% of its SAR 172.5 million capital, reaching SAR 1.357 billion as of December 31, 2018.

The company’s extraordinary general assembly decided to offset accumulated losses through the loans and current accounts of the shareholders, in which the share of Astra was approximately SAR 812.2 million. Meanwhile, the share of Al-Massira International Co., Astra’s partner in Al Tanmiya joint venture, stood at SAR 376 million.

The shareholders also agreed to offset the remaining losses through a capital cut to SAR 28 million from SAR 172.5 million. The move will raise Astra’s stake in Al Tanmiya to 65% from 51% and Al Massira’s stake to 28% from 16%.

Regulatory approvals for those decisions were obtained on Dec. 31, 2019.

It is currently difficult to assess the related financial impact on the group, Astra added.

The net book value of the Saudi-listed firm in Al Tanmiya reached SAR 333 as of Sept. 30, 2019 according to the unaudited consolidated financials. This value is expected to reach SAR 322 million following the capital restructuring process, capital cut and increasing Astra’s stake to 65% as of Dec. 31, 2019.

The final financial impact will be announced after issuance of audited financial statements for fiscal year 2019, the statement added.