Saudi Arabia’s Takween Industries signed a SAR1.3 billion ($346.6 million) Islamic loan with a group of local banks to fund the acquisition of Savola Packaging Co, it said on Wednesday.
Takween in December agreed to buy the packaging unit of the region’s largest food firm Savola Group for SAR910 million ($242.5 million).
The loan has two parts, according to a Takween bourse filing. As well as a seven-year facility to cover the full cost of the acquisition including the assumption of Savola Packaging’s debt, which has a one-year grace period before repayments start, there is a further SAR390 million three-year loan which will be used by Takween for working capital.
The loan, provided by Arab National Bank, Samba Financial Group and Bank Albilad, is guaranteed against shares and revenue of Savola Packaging and its subsidiaries, promissory notes and director guarantees.
Takween added the payment of the purchase price and transfer of ownership is currently in progress, but it did not specify a date for the formal completion of the deal.