Savola Group has struck a deal to sell its operations in Iran to an undisclosed “foreign investor” for SR705m ($187.6m).
The sale encompasses Savola’s food business in Iran, which includes the manufacturing and distribution of edible oils, seafood, bakery and confectionery products.
In a Saudi stock-exchange filing, the company said: “Savola’s divestment of its businesses in Iran comes in line with its ongoing prudent strategy to exit non-core markets.
“This decision reflects the group’s commitment to enhancing value and reallocating resources toward high-potential markets and growth-oriented investments in its food platform.”
Savola added the buyer is not a related party.
The unaudited net book value of Savola’s Iranian operations and investments stood at SR656.5m as of 30 November.
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The transaction is expected to generate an estimated gain of SR2.8m after accounting for the difference between the sale price and the book value, net of transaction costs.
However, the company noted that reclassifications required under International Financial Reporting Standards (IFRS) would result in a net loss of approximately SR1.6bn.
This includes the reclassification of SR1.3bn in foreign currency translation reserve (CTR) and SR251m in non-controlling interests from equity to profit or loss.
The proceeds from the sale will be used to “strengthen the group’s financial position”, the company added.
Savola’s recent exit from Iran follows its withdrawal from operations in Morocco and Iraq in 2023.
For the nine-month period ending 30 September, Savola reported a 1.04% year-on-year decline in net profit attributable to the company’s owners, which fell to SR665.12m.
In February, Savola announced plans to distribute its stake in Saudi food group Almarai to some of its shareholders following its launch of a SR6bn ($1.6bn) rights issue.
