FIPCO signs deal with Eirad Investment to acquire its stake in FPC Industries

Filling & Packing Materials Mfg. Co. (FIPCO) inked an agreement with Eirad Investment Co. to acquire its 20% stake in its subsidiary FPC Industries Co., the company said in a bourse statement.

Accordingly, FPC Industries will now be fully-owned by FIPCO, as the latter previously owned 80% of FPC.

Under the acquisition agreement, Eirad Investment Co. will waive its 20% stake in FPC in return of 20% of net profit, as per the audited annual financial statements for a period of 10 years until Dec. 31, 2029.

Eirad Investment will not, directly or indirectly, run a competitive business in the market place over the agreement term.

As FIPCO owns 80% of FPC, it will be required to submit quarterly consolidated financial statements on time, unlike FPC, which is a limited liability company with a longer grace period for reporting financials.

The acquisition might help FIPCO consolidate taxes and Zakat expenses, as well as revenues and expenses. It might also increase the management efficiency, boost the decision-making process and limit expenses.

The agreement includes no related parties and any development will be announced in due course, the statement added.