Two petrochemical companies in Saudi Arabia are planning a potential merger after incurring significant net losses.
The Saudi Industrial Investment Group (SIIG) said on Sunday its board of directors has issued an approval to hold initial discussions with the National Petrochemical Company (Petrochem) to look into the possibility of merging the two firms.
The announcement comes after the two companies have posted net losses. SIIG had earlier reported that its revenues for April to June in 2020 fell by 18.47 percent, while its net losses amounted to 55 million Saudi riyals ($14.67 million). Petrochem’s net losses for the first half of the year also amounted to 139 million Saudi riyals.
No deal yet
There is no agreement reached regarding the matter yet and the final structure of the potential deal has yet to be decided on, SIIG told the Saudi Stock Exchange (Tadawul) in a bourse filing.
“It should be noted that entering into this study does not necessarily mean that the deal will take place between the two parties,” the company clarified.
“If the deal is agreed upon, this will be subjected to the conditions and approvals of the competent authorities, and the approval of the extraordinary general assembly of both companies,” added SIIG, who owns 50 percent of Petrochem.
(Reporting by Cleofe Maceda; editing by Mily Chakrabarty)
Disclaimer: This article is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Read our full disclaimer policy here.
© ZAWYA 2020