Bawan unit inks SAR 20M deal to buy additional shares in 2 firms

Logo of Bawan Co.

Bawan Co. announced that its subsidiary, Bawan Engineering Industries Co., signed an agreement to purchase the entire shares of Maaly Holding Co. in United Transformers Electric Co. Ltd. (Utec Saudi) and United Technology of Electric Substations and Switchgears Co. (USSG) for a total value of SAR 20 million.

According to a statement to Tadawul, Bawan Engineering purchased the entire shares of Maaly Holding in the two companies, which represents 4.5% of the total shares in each of the two companies, including its rights and obligations, bringing Bawan Engineering’s ownership to 90% in the two companies.

The parties agreed to sell the shares based on the balances of the audited financial statements of the two companies as of Dec. 31, 2023, the statement pointed out, indicating that the approved effective date for the purchase for accounting purposes is Jan. 1, 2024.

The full price will be paid after Bawan shareholders approve the transaction and following the ownership transfer of all shares to Bawan Engineering, the statement highlighted, noting that the terms of the agreement include that parties obtain the necessary regulatory approvals.

The agreement is financed from the company's internal resources and the positive impact of the agreement on Bawan’s results will appear from the beginning of 2024, the statement added.

Bawan's electrical industries segment has a fundamental impact on its strategic plans and future expansions. Therefore, increasing Bawan Engineering's ownership in the two companies will have a positive impact that will maximize shareholders' equity in Bawan.

The combined revenues and profits of the two companies over the last three years is detailed below:

The statement further indicated that Abdullah Abdullatif Al-Fozan, Bawan’s Chairman, is related party.