Saudi Basic Industries Corp said on Sunday it had agreed to sell its subsidiary Saudi Iron and Steel Company (Hadeed) to the Public Investment Fund (PIF) for an enterprise value of 12.5 billion riyals ($3.33 billion).

The transaction is expected to close before the end of the first quarter of 2024, and proceeds from the sale will be used to support SABIC’s growth in the chemicals industry, according to a company statement to the stock exchange. 

The final sale price will be disclosed closer to the completion date.

SABIC, one of the world’s biggest petrochemical companies, reported a massive slump in its second-quarter net profit on lower average sales prices and weaker demand. It said it wants to focus on core businesses as the rationale for the divestment.

The fair valuation of Hadeed’s net assets is expected to result in a non-cash loss of between 2 to 2.5 billion riyals in Q3 earnings, SABIC said. 

As a top manufacturer of steel products, Hadeed has been a big player in the construction of Saudi Arabia’s large infrastructure projects, which are key to its economic transformation plan known as Vision 2030, which the PIF, the kingdom’s wealth fund, is spearheading.

Separately on Sunday, it was announced the PIF had sold its 10.9% stake in National Gas and Industrialization Company through a private share sale for 491.2 million riyals ($130.96 million).

The shares were sold to Jadwa Investment Company which bought the stake for its managed investment funds and clients, according to a bourse statement, with the transaction set to be completed by Sept. 5.