Galfar signs deal to sell its investments in India

February 20, 2019

Galfar Engineering & Contracting Company has signed a preliminary agreement with PMA International LLC to sell all of its investments in India for a value of RO17.2mn.

The company’s investments in India include Galfar Engineering & Contracting (India) Pvt Ltd and five special purpose vehicles for road projects.

‘We would like to inform our esteemed shareholders and investors that the company (seller) on Monday signed a preliminary agreement with PMA International LLC (buyer) for sale of all its investments in India. The parties have agreed for a sale price of RO17.2mn’, Galfar said in a disclosure to the Muscat Securities Market on Tuesday.

It said the buyer will pay ten per cent of the sale price (RO1.72mn) upon signing the final sale and purchase agreement. The remaining amounts will be paid in four equal half yearly installments over a period of 24 months, with interest at a rate of five per cent per annum on the balance amount along with the half yearly installments which will be secured by guarantees, pledges and financial instruments.

Galfar said the sale price of RO17.2mn is against the total net book value of investments of RO15.71mn. The transaction is expected to yield a positive impact of around RO1.5mn for the company.

‘The transaction being with a related party is subject to sanctioning by the regulatory body in Oman and thereafter to be finally approved by the shareholders of Galfar in an extraordinary general meeting (EGM). The notice of the EGM will be sent to all shareholders in due course’, Galfar added.

In October 2017, Galfar’s board of directors had approved to explore potential divestment of the company’s investments in India.

Galfar recorded a consolidated net profit of RO2.9mn for the year ended December 31, 2018 compared to consolidated net loss of RO5.84mn in 2017. The parent company’s net profit came at RO7.01mn for 2018 against a net loss of RO3.7mn in the previous year, according to Galfar’s initial unaudited financial results submitted to the Muscat Securities Market.