The National Industrialization Co. (Tasnee) will be able to bring down its debt servicing charges to about SAR 150-200 million per year after settling around SAR 6.3 billion of debt, chief executive officer Mutlaq Al-Morished said in an interview with Al Arabiya TV.
The sale of its 79 percent-owned titanium dioxide business (Cristal) to Tronox for $1.67 billion in cash and 7.6 million in shares will help Tasnee restructure and reduce its debts, he added.
With the cash component of the deal, Cristal can fully repay bank debt of SAR 6.3 billion. Thus, Tasnee’s debts will be cut from SAR 24.6 billion to SAR 18.3 billion, which will bring down cost of debt.
Cristal’s creditor banks include the Saudi British Bank, an affiliate of HSBC Holdings, Banque Saudi Fransi, Riyad Bank and Alawwal Bank, said Al-Morished.
He added that Tasnee, which has only divested Cristal’s TiO2 business, will become a partner in the world’s largest producer and marketer of titanium dioxide pigment. Cristal shareholders will own 24 percent of the combined entity.
Al Morished said that the company currently has no plans to divest any more stakes.
The acquisition, which is subject to regulatory and shareholder approvals, is likely to be finalized in Q1-2018.
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