Saudi Vitrified Clay Pipe Company has announced to its shareholders that it has signed an agreement to sell the assets of its second plant, located in the Second Industrial City in Riyadh, for a total sale value of SAR45 million ($12 million).

 

The agreement with Al-Mutahida Al-Namothajiya Industries Company to sell also covers the assignment of the land lease on which the plant is established, said a filing to the Saudi Stock Exchange.

 

This transaction is aligned with the company’s strategic plans to enhance asset and resource utilisation efficiency and to support future growth, it said.

 

The plant produces vitrified clay pipes and related fittings. The company said the sale is due to the decline in demand for vitrified clay pipes and the limited economic feasibility of retaining the second plant, while achieving higher economic feasibility through selling the second factory and keep producing clay pipes and accessories from the company's first factory. The proceeds from the sale will be utilized to fund operating activities, in the best interests of the company and its shareholders, it said.

 

The transaction is expected to generate a capital gain of SAR20.1 million. 

 

The completion of the transaction remains subject to MODON’s approval of the lease assignment. -TradeArabia News Service