Chemanol faces SAR 73M lawsuit

Logo of Methanol Chemicals Co. (Chemanol)

Methanol Chemicals Co. (Chemanol) announced that the former owners of Global Company for Chemical Industries (GCI) filed a commercial lawsuit against the company before the Dammam Commercial Court, seeking SAR 73 million in the unpaid portion of the agreed purchase price.

In a statement to Tadawul, Chemanol said GCI’s former owners are Al Abdullatif Holding Group Holding Co., Dar Al-Balad Commercial Co., Najm for Commercial Investment Co., Ammar Al-Khudairi and Faisal Al Raees.

According to the statement of claim, a sale agreement was signed in May 2024 during the term of the former board of directors. Under the agreement, 80% of the shares in GCI (owned by the plaintiffs) were sold to Chemanol.

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The sellers are now seeking Chemanol to pay the remaining amount of the deal as per the share purchase agreement, the statement said.

Chemanol appointed a specialized legal firm to represent it in the lawsuit, noting that it rejects the claims made by the former owners and denies any liability towards them.

However, the company said that it was not possible at this stage to assess any potential liability until the case is concluded.

Last April, the company’s board of directors decided to hire a specialized third-party forensic auditor to investigate the facts and circumstances surrounding the acquisitions of ADDAR Chemicals Co. (ACC) and GCI, Argaam reported earlier.

Chemanol indicated that it is currently unable to determine the potential financial impact, noting that it was too early to assess the legal implications and risks of this case. Hence, it will announce any relevant developments in due course.

In June 2023, Chemanol signed two binding offers to acquire 84% of ACC and 80% of GCI.

In February 2024, the company finalized the regulatory measures, as well as the ownership transfer related to the acquisition of ACC stake for a SAR 46.2 million cash consideration, to be disbursed partially and within specified intervals.

In May 2024, Chemanol announced the completion of regulatory procedures for transferring 80% of GCI’s ownership, fulfilling all legal documents and obtaining approvals from relevant authorities. The deal was valued at SAR 80 million payable in part and at specified intervals.