Fitaihi Group inks SAR 14.4 mln contract to sell stake in Luxury Goods to Mohammed Fitaih

Fitaihi Holding Group announced that it signed a sale contract today, Oct. 25, with the board member Mohammed Ahmed Hassan Fitaihi to sell the group's 80% stake in its subsidiary, Luxury Goods Trading Co. Ltd.

The company explained in a statement to Tadawul that the total value of the contract, amounting to SAR 14.36 million, will be paid as follows:

1) Receiving SAR 10.75 million in cash (equivalent to 74.9% of the transaction value).

2) Receiving gold and jewelry goods, selected by Fitaihi Holding Group, from Luxury Goods Trading Co., at a fair value of SAR 1.27 million (equivalent to 8.8% of the transaction value).

3) The remaining value of SAR 2.34 million will be scheduled in six installments until Dec. 31, 2022 (equivalent to 16.3% of the transaction value).

The financial impact of this deal was recorded in H1 2020, as the company incurred losses from discontinued operations amounting to SAR 6.5 million, as a result of the group’s decision to exit and sell its share capital in Luxury Goods Trading.

KPMG, an independent party, was assigned by Fitaihi Holding Group’s board of directors, to evaluate the subsidiary firm as on May 31, 2020.

The evaluation indicated that the subsidiary’s average value ranged between SAR 17 million and SAR 18.9 million, stressing that the average evaluation has been applied.

Mohammed Fitaihi founded Luxury Goods Trading Co. Ltd. in 2004, to operate in the wholesale and retail trade of precious metals and gemstones.

Luxury Goods owns the brands (Baby Fitaihi), (M. Fitaihi), and (Mamluki). It has 22 branches in the Kingdom, two branches in the UAE, and one in Kuwait.

According to data available with Argaam, in June this year Fitaihi Group signed a non-binding memorandum of understanding (MoU) with Mohammed Fitaihi to sell 80% of its stake in Luxury Goods.

Fitaihi, who owns 20% of Luxury Goods, holds the position of general manager in the subsidiary.

In July, the company agreed at its ordinary general meeting to sell group’s 80% stake in Luxury Goods to Mohammed Fitaihi for SAR 14.36 million.