Former ADDAR shareholders sue Chemanol, claim over SAR 100M

Logo of Methanol Chemicals Co. (Chemanol)

Methanol Chemicals Co. (Chemanol) said the former shareholders of ADDAR Chemicals Co. (ACC)  filed commercial lawsuits with the Commercial Court in Dammam on Dec. 6 against the company regarding the acquisition of ADDAR.

In separate statements on Tadawul, Chemanol said the second party in the lawsuits — ADDAR former shareholders— comprises Alabdulatif Group Holding Co., Dar Al-Balad Commercial Co., Najm for Commercial Investment Co., Omran Mohammed Al-Omran & Partners Investment Co., and Vision International Investment Co.

According to the court filings, under a sale agreement dated June 8, 2023, 84% of ADDAR’s shares — previously owned by the plaintiffs — were sold to Chemanol during the former board’s term.

In the first lawsuit, the plaintiffs demand that Chemanol pay the remaining amount of SAR 43.89 million, representing the outstanding balance of the agreed purchase price for ADDAR.

In a separate statement, the company said the former owners filed a second lawsuit seeking SAR 15.4 million, which they claim to have paid toward one of the bank facilities and operating expenses for ADDAR until November 2023.

In a third lawsuit, the plaintiffs ask the court to order Chemanol to pay SAR 45.11 million, paid by them as guarantees for bank loans related to ADDAR.

On the expected financial impact, Chemanol said it cannot be currently estimated. It will be assessed based on updates and progress in the legal proceedings. The company added that legal implications and risks cannot yet be determined and that it will announce any developments in due course.

Meanwhile, Chemanol appointed a legal firm to represent it in the case. As the company denies the claims made by the former shareholders and rejects any liability toward them, it said it is not possible at this stage to assess responsibility until the legal proceedings conclude. The company added that any developments related to the case will be disclosed in due course.

According to Argaam data, Chemanol signed a share purchase agreement (SPA) in November 2023 to buy ADDAR for SAR 46.2 million. The amount was to be paid partially and in stages based on conditions set out in the SPA.

In February 2024, Chemanol said it completed all regulatory procedures related to the ownership transfer, obtaining approvals from relevant authorities.