MAADEN

30 April, 2024 09:49

Saudi Arabian Mining Company (Ma’aden) announces the signing of a Share Purchase and Subscription Agreement for the acquisition of the entire share of Mosaic Phosphates B.V. in Ma’aden Wa’ad Al Shamal Phosphate Company by means of a capital increase by issuing new shares in Ma’aden to Mosaic Phosphates B.V.

Element ListExplanation
Introduction Saudi Arabian Mining Company (Ma’aden) announces the signing of a Share Purchase and Subscription Agreement on 20/10/1445H (corresponding to 29/04/2024G) (the “SPSA”) with the Mosaic Company (as the “Guarantor”) and Mosaic Phosphates B.V. (the “Seller”) (the Guarantor, the Seller and Ma’aden are collectively referred to as the “Parties” and each as a “Party”) for the purpose of acquiring the entire shares held by the Seller in Ma’aden Wa’ad Al Shamal Phosphate Company (“MWSPC”), in the amount of two hundred and ten million nine hundred and thirty-seven thousand and five hundred (210,937,500) shares, representing 25% of the share capital of MWSPC (the “Acquisition”). The Acquisition also includes Maaden acquiring the Guarantor’s rights under the MCP/DCP Product Marketing Agreement, and the Fertilizer Product Marketing Agreement signed between the Guarantor and MWSPC dated 24 April 2014G. MWSPC is a joint venture between Ma’aden, the Seller, and Saudi Basic Industries Corporation (SABIC), based in the Kingdom of Saudi Arabia which operates a fully integrated phosphate production facility with a design capacity of 3 million tonnes of Di-ammonium Phosphate. Under the SPSA, the Guarantor agrees to guarantee the due and punctual performance, observance and discharge of certain obligations of the Seller when they become due for performance in accordance with the terms of the SPSA. Based on a valuation of five billion six hundred and twenty-four million nine hundred ninety-nine thousand nine hundred eighty Saudi Riyals (SAR 5,624,999,980), the Acquisition consideration will consist in full, in an in-kind consideration through the issuance of new shares in Ma’aden to the Seller (or any affiliate of the Seller designated by the Seller to Ma’aden), calculated based on the volume-weighted average price (VWAP) of the shares of Ma’aden, and representing approximatively 2.92% of the share capital of Ma’aden after completion of the Acquisition. At completion of the Acquisition, the share capital of Ma’aden will be increased from thirty-six billion nine hundred and seventeen million seven hundred and thirty-four thousand three hundred and eighty Saudi Riyals (SAR 36,917,734,380) to thirty-eight billion twenty-seven million eight hundred fifty-eight thousand seven hundred ten Saudi Riyals (SAR 38,027,858,710) by issuing one hundred eleven million, twelve thousand, four hundred thirty-three (111,012,433) new shares with a par value of ten Saudi Riyals (SAR 10) per share (the “New Shares”) in favor of the Seller (or any affiliate of the Seller designated by the Seller to Ma’aden), thus increasing the number of its shares from three billion six hundred and ninety one million seven hundred and seventy three thousand four hundred and thirty eight (3,691,773,438) ordinary shares to three billion eight hundred two million seven hundred eighty-five thousand eight hundred seventy-one (3,802,785,871) ordinary shares, representing an increase of approximatively (3.01%) Ma’aden’s share capital prior to the issuance of the New Shares (the “Capital Increase”). At completion of the Acquisition, Ma’aden’s stake in the share capital of MWSPC will increase from 60% to 85%, while the percentage of direct and indirect ownership by the Seller in Ma’aden will be equal to approximately (2.92%)
Date of Signing the Agreement 2024-04-29 Corresponding to 1445-10-20
Name of (the Acquired Company)/(Asset to be Purchased) 25% stake in MWSPC (in addition to the Guarantor’s rights under the MCP/DCP Product Marketing Agreement and the Fertilizer Product Marketing Agreement).
Value of (The Company to be Acquired)/(The Asset to be Purchased) The 25% stake in MWSPC together with the Guarantor’s rights under the MCP/DCP Product Marketing Agreement and the Fertilizer Product Marketing Agreement, has a valuation of five billion six hundred and twenty-four million nine hundred ninety-nine thousand nine hundred eighty Saudi Riyals (SAR 5,624,999,980). Based on this valuation, the Acquisition consideration will consist in full, in an in-kind consideration through the issuance of new shares in Ma’aden to the Seller (or any affiliate of the Seller designated by the Seller to Ma’aden), calculated based on the volume-weighted average price (VWAP) of the shares of Ma’aden, and representing approximately 2.92% of the share capital of Ma’aden at completion of the Acquisition.
Value of the listed company The valuation of Ma’aden shares as of 24/04/2024G calculated based on the volume-weighted average price (VWAP) of the shares of Ma’aden, represents an equity value of (187,062,160,103) Saudi Riyals at (SAR 50.67) per share.
Capital before Increase SAR 36,917,734,380
Number of Shares before Increase 3691773438
Value of capital increase One billion one hundred ten million one hundred twenty-four thousand three hundred thirty Saudi Riyals (SAR 1,110,124,330)
Capital Increase Percentage (%) 3.01 %
Capital After Increase Thirty-eight billion twenty-seven million eight hundred fifty-eight thousand seven hundred ten Saudi Riyals (SAR 38,027,858,710)
Number of Shares After Increase 3802785871
Share Exchange Equation (Ratio) Based on the number of 210,937,500 shares desired to be acquired in MWSPC, and based on the number of the New Shares that will be issued in Ma’aden to the Seller, the share swap ratio is (0.526) New Shares in Ma’aden for everyone (1) share in MWSPC.
Potential Effects or Risks for Issuing such Shares on the Shareholders of the Current Company, the Company, and Decision Making thereon At completion of the Acquisition, Ma’aden’s stake in the share capital of MWSPC will increase from 60% to 85%, while the percentage of direct and indirect ownership by the Seller in Ma’aden will be equal to approximately (2.92%). The ownership of the current Ma’aden shareholders will decrease from 100% to 97.08%.
Listed Company's Ownership Percentage in (Company to be Acquired)/(Asset to be Purchased) after the Issuance of Shares (%) 85 %
Ownership Percentage of Shareholders to Whom New Shares will be Issued after Conclusion of the Acquisition (%) 2.92 %
Additional Information or Substantial Conditions Completion of the Acquisition will be subject to the satisfaction of certain regulatory and corporate conditions, including but not limited to the approval of the Capital Market Authority, the Saudi Exchange including other regulatory approvals (as applicable), and the extraordinary general assembly of Ma’aden. The SPSA includes customary fundamental warranties given by each Party and tax warranties given by the Seller. Saudi Basic Industries Corporation (SABIC) will remain a 15% shareholder in MWSPC after the completion of the Acquisition. Under the SPSA, the Seller is subject to a lock-up period of up to five (5) years commencing from the date of the completion of the Acquisition. After the third year from the date of the completion of the Acquisition, the Seller will be free to directly or indirectly transfer or dispose of a fixed number of the New Shares without the prior written consent of Ma’aden, which shall increase to an amount up to all of the New Shares on the fifth-year anniversary of the completion of the Acquisition, in accordance with the terms of the SPSA. The Parties have also agreed on matters related to determining a mechanism for the Seller’s exit from Ma’aden after the fifth anniversary from the date of the completion of the Acquisition, if the Seller wishes to do so, and all relevant details will be disclosed in Ma’aden’s shareholders’ circular upon its publication. Ma’aden will announce any material developments in respect of the Acquisition as they may arise. Ma’aden has appointed HSBC Saudi Arabia as the financial advisor and AS&H Clifford Chance Law Firm as the legal advisor.
Related Parties The Acquisition does not involve related parties.
The expiry date of the agreement Either Ma’aden or the Seller may terminate the SPSA in the event that completion has not occurred by 30 April 2025G, or such other date as the Parties may agree in writing from time to time.
Agreement Termination Terms The SPSA may be terminated prior to completion of the Acquisition by Ma’aden or the Seller at the occurrence of certain events, including (without limitation) if there is a breach by either Party to their representations and warranties under the SPSA (which have not been cured, if capable of remedy, within the time period specified in the SPSA) or if the completion of the Acquisition has not occurred by the date that the Parties agreed to, or may agree to, in writing from time to time.
Approvals The completion of the Acquisition remains subject to a number of pre-conditions, including, without limitation: 1. Obtaining the approval of the Capital Market Authority regarding the Capital Increase and the shareholders’ circular. 2. Obtaining the approval of the Saudi Stock Exchange (Tadawul) to list the New Shares resulting from the Capital Increase. 3. Obtaining the approval of the extraordinary general assembly of Ma’aden, in accordance with Ma’aden’s bylaws and the provisions of the Companies Law and the Rules on the Offer of Securities and Continuing Obligations. 4. No material adverse change with respect to MWSPC (as defined in the SPSA) having occurred. 5. No material adverse change with respect to Ma’aden (as defined in the SPSA) having occurred. 6. No governmental or regulatory authority in the Kingdom of Saudi Arabia having enacted any law, order, injunction, judgment or decree to prohibit the Acquisition or make it illegal.

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