By Mohammed Abu Meleeh
Riyadh-Mubasher: Saudi Steel Pipe Co. (SSPC) has acquired the stake of its South Korean partner TSM Tech Co. in Titanium Steel Manufacturing (TSM Arabia) for a total of only SAR 1, the company said in a filing to the Saudi bourse.
Riyad Al-Rabiah, SSPC’s vice chairman, told Mubasher by phone that the SAR 1-deal was due to the fact that the foreign partner should have supported or exited the joint venture, adding that TSM Arabia faces financial challenges so it has given up its stake and SSPC will in return incur TSM Tech’s financial burdens.
Al-Rabiah added that TSM Tech operates in several promising fields in Saudi Arabia, and this was the reason his company acquired it.
“However, such industries take some time to bear fruit,” the vice chairman said.
TSM Tech operates with a production capacity of 12,000 tonnes per annum, and its investments reach SAR 100 million.
Before the acquisition, SSPC was holding 70% in the titanium steel producer’s capital reaching SAR 32 million, while the foreign partner was owning 30%.
Under the agreement, TSM Arabia has the right to repurchase its equity or portion of it for the same value within one year from amending the commercial register. However, the South Korean firm should compensate SSPC for the financial support and guarantees provided to the joint venture.
Translated by Abdul Maguid Aboshahla
