SPM says process of recovering Moroccan subsidiary, plants still under termination procedure

Saudi Paper Manufacturing Co. (SPM) said the process to recover its Moroccan subsidiary and its plants are still under official procedures of termination.

The company clarified today in a bourse statement that its lawyer in Morocco received a judicial order requiring precautionary seizure on the property as a guarantee for the payment of Moroccan Dirham (MAD) 38 million (SAR 15.5 million). 

Accordingly, the total amount of MAD 48 million (SAR 19.6 million) has been seized by the commercial court, SPM added, indicating that the company had previously announced a seizure of MAD 10 million.

The total value of both precautionary seizures exceeds the plant’s value under the sales convention which the buyer failed to abide.

The step will have a positive impact on the company’s financials upon the recovery of its subsidiary and plant, the company said, indicating it will not hesitate to protect its interests and shareholders’ rights.

Any subsequent developments in this regard will be announced in a timely manner, the statement added.

On Feb. 9, 2020, the Saudi-listed firm announced it had signed a pledge in January 2019 to sell Moroccan Paper Converting, wholly owned by its subsidiary, Saudi Investment and Industrial Development.

Later, SMP clarified that the Moroccan plant has been put under precautionary seizure, adding an appeal to annul and suspend the sale procedures was also filed since the agreed amount to finalize the deal was not paid.