Molan files legal action against Yara International over contract annulment

Molan Steel Co. filed a lawsuit against Yara International Ltd. before the Commercial Court in Riyadh to nullify a purchase agreement for its subsidiary, Mayar International Industry Co., valued at SAR 34.88 million, the company said in a statement to Tadawul.

The lawsuit was filed on the grounds that Yara International made a fundamental error in the financial statements issued on the purchase date, Nov. 30, 2024, which formed the basis for the purchase price. This error led to a significant increase in the contract value.

Molan expects to recover SAR 17 million previously paid to Yara International and eliminate all liabilities and assets arising from the contract, as reflected in its interim financial statements dated June 30, 2025.

The company said the legal implications and potential risks associated with the case cannot be determined at this stage. However, based on available documentation and legal advice, Molan was informed it has a valid legal basis to seek contract nullification. It formally notified Yara International of its intention to pursue legal action and had previously attempted an amicable settlement, but failed.

Molan added that it does not expect to incur any liabilities as a result of initiating this legal action and will disclose any material developments in due course.

According to data available on Argaam, Molan announced in December 2024 that it had signed an agreement with Yara International to acquire 100% of Mayar International Industry for SAR 34.88 million.

In July, Molan received a notice of a commercial lawsuit filed by Yara International before the Commercial Court in Riyadh demanding SAR 17.88 million in outstanding dues from the sale of the subsidiary, as well as SAR 2 million in compensation for litigation-related damages.

A preliminary court ruling in that case required Molan to pay SAR 17.88 million while rejecting all other claims.