Mohammad Al-Mojil Group (MMG) said it signed today a memorandum of understanding (MoU) for the entry as a strategic investor of Saudi FAS Holding Company.
FAS Holding is a Saudi limited liability company privately owned by Fawaz Abdulmajid, and Salman Al-Hokair with head office in Riyadh.
The MoU includes the following terms and conditions:
1- Contribution by the Investor of SAR 327 million, SAR 227 million of which as capital injection and SAR 100 million as a subordinated loan
2- After restructuring the debt, trade obligations and paid up capital, the Investor will own 40 percent of the issued shares of MMG and the current shareholders the remaining percentage (30 percent to the public and 30 percent to the founding shareholder)
3- Restructuring the board of directors with distribution consistent with the new shareholding structure in accordance with applicable rules an regulations
4- The Investor has the right to include under his contribution another strategic regional investor
5- The MoU is subject to completing a definitive agreement among the parties within 6 months and is also subject to regulatory approvals in line with applicable rules
MMG board of directors have approved the terms of the MoU. The board will present their recommendation to the shareholders as per applicable rules and regulations and will announce further details when available.
This is a significant step in the process of restructuring plan of MMG to achieve profitable operations and rectify its shareholders equity position. The success of such plan will rely on the customers, shareholders and specifically, the lenders and suppliers to cooperate to the best interest of all stakeholders.