Al Sorayai Trading And Industrial Group Co. (Al Sorayai Group) has sold its 99 percent stake in UK-based Millennium Weavers – Europe on June 30 to Victoria Company in Belgium for SAR 14.7 million, the company said in a statement to Tadawul on Tuesday.
The move came in line with the group’s restructuring plan that aims to dispose of non-yielding operations amid the current market conditions. It said the global market situation and Brexit have harmed its sales volumes and currency rates.
The company is a manufacturer and trader of rugs, carpets, fabrics, curtains and furniture.
The deal is expected to have a negative impact on Al Sorayai Group’s financial results by around SAR 11.8 million.
In a separate statement, Al Sorayai said that it decided on the same date to close its fully owned subsidiary Millennium Weavers US Ltd.
However, Al Sorayai will keep its US-based Millennium Weavers Holding Co. running, as the multi-activity company can benefit from future tax exemptions if it ever decided to start or resume an investment in the future.
The annual cost of keeping the US holding company is insignificant when compared to the potential benefit, the statement said.
All the required legal and tax procedures to finalize both the deal and the closure will be finished within six months.
Al Sorayai also approved on June 30 to merge the business of its wholly-owned subsidiary Home Styles with its retail activities, due to their similar operations and sales mechanisms, it said in a separate bourse statement on Tuesday.
The merger will help the group cut labor costs at Home Styles exhibitions and optimize use of all resources, including sales teams, warehouses and equipment.
Al Sorayai is finalizing all the required paperwork in a process that is expected to take six months.
The merger will have a negative financial impact of SAR 11 million during this period but will lead to cost savings later on, in light of the group’s sales unit turnaround plan, the statement added.
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