Sale of Helsinki's Nord Water fails - Saudi-Arabian buyer "goes quiet"
Owners of water bottling company face mysterious silence
The City of Helsinki's planned deal to sell its water bottling company Nord Water to a Saudi-Arabian buyer has fallen flat.
The apparently all-set contract collapsed when the buyer, the Almalik Holding Company (MAHC), failed to come up with the agreed purchase money last Monday. Nord Water was priced at EUR 829,000.
"This came to us as a total surprise. We trusted that the transaction would take place, as the prospective buyer had gone to so much trouble to ensure the closing of the deal", says Helsinki Water managing director Timo Kulmala.
"The buyer just went quiet all of a sudden."
Communication from the Saudi end simply ceased during last week. MAHC have not given any explanations for their sudden lack of interest towards closing the deal.
"Now we are back at square one", Kulmala says.
Nord Water is owned by the City of Helsinki and it is a subsidiary of Helsinki Water. The company was founded two years ago and it employs five people.
Nord Water was supposed to be off to a flying start, when Helsinki Water received an order for bottled water from a Saudi family. The deal collapsed when the buyer failed to open a reimbursement account vouched for by a bank.
As Nord Water did not succeed in securing orders from elsewhere either, the City Board decided in November to put the loss-making company up for sale.
Seven buyers were originally interested in Nord Water, and the highest bid was placed by the Saudi-Arabian corporation MAHC, owned by a private individual Mansour Almalik.
In January Almalik visited Helsinki to negotiate on the deal. Kulmala, who was initially impressed with Almalik's business conduct, was somewhat devastated when the deal fell through.
"A week ago I was almost certain the transaction would take place. Now finding a domestic buyer is beginning to look like the most probable option. This whole experience has been almost traumatic."
Kulmala still trusts in Nord Water's business idea. "So much effort has been put into this company. Nord Water has lots of direct contacts with foreign customers. I still believe our investment in the firm did not go to waste."
Previously in HS International Edition:
Helsinki sells 1,400,000 bottles of water to Saudi Arabia (7.1.2004)