Savola Group announced today that it signed on Thursday an agreement to sell its entire stake in Masharef real estate development project located in Jeddah to Kinan International Company for Real Estate Development owned 29.9% by Savola. The sold stake represents the Savola's entire ownership of 30.4%, both direct and indirect, in Masharef project amounting to SR 593.5 million.
In a statement issued today, the Group said that pursuant to the agreement, the buyer will pay the price in four installments: 1st payment equal to SR 112 million paid upon signing the agreement, 2nd payment amounting to SR 167.6 million payable on 1st December 2015, and the 3rd and 4th installments (SR 159.8 million and SR 154.1 million respectively) each to be paid after one year from the preceding installments. The sale price has been decided based on market value and in accordance with independent evaluations made in this regard.
It noted that Savola will recognize as a result of this transaction a net capital gain of around SR 187 million, which will be reflected in the 3rd quarter 2014 of financial results.
Dr. Abdulraouf Mohammed Mannaa, Savola Chief Executive Officer and Managing Director stated that this transaction is aligned with the Savola's strategy of focusing on its core businesses (Foods and Retail sectors) and gradually exiting from its non-core businesses, indicating that proceeds from this transaction will be utilized for supporting Savola's core businesses.