Saudi Arabia's Takween Advanced Industries announced on Tuesday that it is planning to start talks with a Chinese firm to sell a majority stake in its fully-owned subsidiary Advanced Fabrics Factory Company (SAAF).
The company said in a stock exchange statement that it has signed a non-binding memorandum of understanding (MoU) with JOFO Nonwoven Co to sell 70 percent of SAAF.
SAAF manufactures recycled polypropylene granules and nonwoven fabric.
The two companies have agreed that the fair value of SAAF is 307.5 million Saudi riyals ($82 million), the statement noted, adding that final negotiations would begin after the completion of due diligence by the Chinese firm.
The MoU has a validity of 365 days beginning from the date of commencement of due diligence and is extendable with the consent of both parties, the statement said.
It also clarified that the potential sale does not involve any related parties of the company.
Tadawul-listed Takween Advanced Industries manufactures and sells plastic packaging products and non-woven fabrics with factories in Saudi Arabia and Egypt, according to company's profile on the exchange's website.
In May, Czech Republic-based PFNonwovens Holding (PFN) had announced that it has sold its nonwovens business and plant in China to JOFO. A statement, posted on US-based nonwoven industry body INDA's website, said the transaction would enable JOFO to enter the growing medical sector on top of its existing hygiene and industrial businesses. It said the Shandong-based company has four manufacturing sites across the Asian region.
(Writing by Syed Ameen Kader; Editing by Anoop Menon)
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