Saudi Paper Manufacturing Company announced signing of an agreement of understanding to purchase the fifth production line with a production capacity of 60,000 tons of tissue paper rolls with TOSCOTEC. The company announced the signing of an agreement to manufacture and supply a production line for tissue paper rolls, based on the approval of the Board of Directors on September 17, 2022 as part of the project implementation. Transaction Details: Manufacturing, supplying, installing and start up a production line for raw tissue paper rolls with a design production capacity of 60,000 tons annually.

Transaction Value: Equivalent to SAR 166 million. Transaction Terms: Advance payment within a maximum period of two months from the date of signing the contract, and the rest in installments that correspond to delivery, installation, receipt and final operation. It extends from the date of signing up to a period of 16 months, and the company obtains a performance guarantee from the supplier according to the terms of the contract.

Transaction Funding Method: The purchase of the machine for the new fifth production line will be financed through the company's operating revenues and the sale of some non-operating assets, in addition to the proceeds of legal claims for which judgments were issued in favor of the company, and part through banks and local financing agencies. Transaction Execution Date is October 1, 2022. Transaction reasons: Increasing the company's production capacity of tissue paper rolls from 130,000 tons to 190,000 tons per year, to meet the requirements of the local market and increase exports.

The value of the deal, which is the purchase of a machine with a value equivalent to SAR 166 million, is part of the value of the investments in the fifth production line, previously announced, with an approximate value of SAR 300 million.