BCI, AECI agree to drop proposed JV, terminate MoU

BCI said the decision was based on internal strategic adjustments undertaken by AECI Ltd.

Basic Chemicals Co. (BCI) said that following joint discussions with South African AECI Ltd. regarding the proposed joint venture (JV), both parties agreed not to proceed with the project to establish a strategic partnership to localize the manufacturing of a range of chemicals. This is in addition to the conclusion of a memorandum of understanding (MoU) and the exclusivity undertaking.

In a statement to Tadawul, the company said that this decision was based on internal strategic adjustments undertaken by AECI Ltd., including the restructuring of its business portfolio and a realignment of its corporate priorities, which led both parties to agree that continuing the JV discussions would not be aligned with their respective strategic directions at this stage.

The company confirms that this agreement does not reflect any negative assessment of the investment opportunity or either party and that the cooperation during the past period was conducted with full transparency and professionalism.

The termination of the MoU does not entail any financial or contractual obligations on BCI, and no binding agreements or financial investments requiring disclosure have been entered into, the statement added.

There is no material financial impact on the company’s financial statements at this stage as a result of the termination of the MoU, BCI noted, indicating that it will continue to assess strategic partnership opportunities that support its business expansion and the localization of chemical industries. Any subsequent material developments will be disclosed immediately.

According to data available on Argaam, BCI and AECI Ltd. signed in May an MoU to establish a JV in the Kingdom aimed at localizing the manufacturing and development of a range of specialty chemicals used in water treatment and mining.

AECI is listed on the Johannesburg Stock Exchange.

The MoU sought to form a strategic partnership to localize the production of various chemicals, including coagulants, flocculants, flotation reagents, coatings, and chemical additives. These products are intended for use in oil and mining operations, product enhancement, and industrial wastewater treatment.