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Sabic nears completion of Hadeed sale: Petrochemicals giant Sabic has obtained all necessary approvals and satisfied conditions precedent to close the sale of its steel subsidiary Hadeed to the Public Investment Fund (PIF), it said in a disclosure to Tadawul. Sabic has also completed the transfer of the full ownership of Hadeed to the PIF, it added.
What we know: The transaction — which has an enterprise value of SAR 12.5 bn — should close in the second half of this year. The transaction will close with a “completion accounts mechanism” — in finance-speak, that means the price PIF will pay Hadeed will ultimately be calculated based on Hadeed’s financials at the time of close.
Sabic’s expectations: It said earlier this year that it expects the sale of its steel subsidiary Hadeed to the PIF to draw in USD 1.7-1.9 bn upon its completion.
About the sale: Sabic agreed last year to sell Hadeed to PIF in a bid to “optimize its portfolio and focus on its core business” and contribute to the growth of several sectors including renewables and mining. It said the divestment also aligns with the sovereign fund’s efforts to progress the country’s industrial development and meet growing local demand for steel. Officials had initially hoped to finalize the sale in 1H 2024.
About Hadeed: Sabic’s steels unit focuses on manufacturing steel products, including reinforcing bar, coiled wire, billets, slabs, sections, hot and cold rolled coil, galvanized coil, preprinted coil and hot film laminated coil.
The divestment was among factors leading Sabic to its first net-loss ever: Sabic reported a net loss of SAR 2.8 bn in 2023 in what was the petrochemical giant’s first-ever net loss. The losses came partly due to discontinued operations after the divestment of its steel subsidiary Hadeed.
