Almarai Co., Saudi Arabia’s largest food producer by market value, may book an impairment of 136.7 million riyals ($36.5 million) on its investments in Zain Saudi, Chief Financial Officer Paul-Louis Gay said.
The original value of Almarai’s investment was about 270 million riyals to 280 million riyals, and the impairment represents about 40 percent of that, he said in phone interview from Dubai today.
“From what we know, the share price will go up if they find a solution for their capital restructuring plan, which is not likely to be honest,” he said. Almarai bought Zain Saudi shares for 10 riyals a share, Gay said.
Kingdom Holding Co., controlled by Saudi billionaire Prince Alwaleed and Bahrain Telecom Co. last month abandoned a plan to buy 25 percent in Zain Saudi, the kingdom’s third-largest mobile-phone company by market value, for $950 million from Kuwait’s Zain Group. The deal fell through because lenders refused to transfer debt guarantees from Zain to purchasers, Al Watan newspaper reported on Oct. 4, citing Zain Saudi’s Chairman Prince Hussam al-Saud.
Zain Saudi shares have dropped 26 percent this year and closed 1.7 lower at 5.75 riyals in Riyadh today.