Saudi steel manufacturers announce equity reshuffles
Financial changes are afoot at Saudi Steel Pipe Company and Gulf Steel Works Factory
Minority shareholders at Saudi Steel Pipe Company have agreed to sell a 47.8% equity stake to Luxembourg-based steel pipe maker Tenaris. Meanwhile, Saudi’s regulator has approved the initial public offering (IPO) of Gulf Steel Works Factory Company.
According to a statement filed on Saudi stock exchange, Tadawul, by loss-making Saudi Steel, minority shareholders have agreed to sell a 47.8% stake in the company to Luxembourg-based steel pipe maker Tenaris’s Saudi subsidiary, Tenaris Saudi Arabia, for $144m (SAR540m).
The stake represents 24.3 million shares in the company at a price of $5.92 (SAR22.20).
According to the filing, the sale is expected to complete before 31 March, 2019, subject to obtaining the relevant regulatory approvals and the satisfaction of other conditions in accordance with the sales and purchase agreement.
News of the equity sale came weeks after the manufacturer reported an $11.1m (SAR41.8m) net loss in H1 2018.
An impairment loss of $5.6m (SAR21m) for one of the company's bending units was largely to blame for the double-digit loss in the first six months of the year.
Additionally, Saudi's Capital Market Authority (CMA) has approved the IPO of six million shares of Saudi-based Gulf Steel Works Factory Company, according another Tadawul filing.
This figure represents 30% of the company's capital.
The company, based in Al Jubail in Saudi’s Eastern province, serves oil and gas, petrochemicals, and mining industries in the kingdom.
It offers pipe racks, equipment and boiler structures, utility tanks, and skids, as well as designing, detail engineering, pipe line construction, repair, and modification work, according to its company profile provided by Bloomberg.