Aseer discloses financial impact of land deed cancellation

The financial impact of the recent land plot cancellation included writing off the land’s book value of SAR 181.5 million (under real estate investments), Aseer Trading, Tourism and Manufacturing Co. said in a bourse statement today.

It also represents the purchase value of SAR 214.5 million and SAR 5.24 million for brokerage fees, after deducting a decline in land value of SAR 38.24 million. 

The impact of the land sale cancellation on the firm’s balance sheet also includes the following:

- Writing off the remaining amount of SAR 12.5 million under “creditors and payables” which represents the un-paid land price. 

- Adding SAR 202 million under “trade and other receivables”, representing the amount paid to the seller.

- Adding SAR 5.24 million under “trade and other receivables”, representing the amount paid to the broker.

Meanwhile, the financial impact on the income statement includes adding SAR 38.24 million under “other revenues”, representing the decline in land value, which was previously anticipated as losses in 2017.

This disclosure came after thorough legal, accounting and auditing consultation, the company said, asserting it is taking all the necessary measures to preserve shareholders’ rights. 

According to data compiled by Argaam, the company bought in July 2009 a 3.2 million square meter land in Northern Riyadh in order to establish a medical and educational city, as well as several real estate projects. 

In April, the firm received a letter from the seller, revealing that a court order cancelled the sale.