Jazan expects to finalize Bakri acquisition in few months: chairman
Jazan Energy and Development Co. (JAZADCO) expects to complete its planned acquisition of Bakri International Energy Co. within two or three months, chairman Ahmed Al Sanea told Argaam in an exclusive on Monday.
The purchase, which was originally scheduled for completion by May 31, 2019, has been almost finalized.
Under the deal, JAZADCO will pay an additional earn-out equivalent to the average net profit of Jeddah Fuel Supply Co., which is 35 percent owned by Bakri.
“Jeddah Fuel Supply, one of the acquired entities under the deal, provides fuel services at Jeddah’s King Abdulaziz International Airport, which is likely to begin full operations next year, Al Sanea said.
“When Jeddah Fuel commences operations in the following three fiscal years, we will receive an average 10.5 percent of its profit, in return for the additional earn-out,” he added.
JAZADCO’s value does not imply its goodwill and liquidity under the deal. The company’s value is much higher than the assessed amount.
Meanwhile, JAZADCO’s recently-announced biodiesel plant will be a qualitative shift, and is expected to account for 30-34 percent of returns in average.
The company is planning to focus on the energy sector, including storage systems, in line with its new strategy and the Saudi Vision 2030, Al Sanea concluded.
Earlier this month, the energy firm signed a final purchase agreement with Rawafed Al Hadara Holding Co. and Quintet Co. Ltd. for Shipping & Maintenance to take full control of Bakri International through a cash and in-kind consideration, Argaam reported.