The National Agricultural Development Company (NADEC) announces recent developments relating the final agreements pertaining to the acquisition process of the Second Milling Company with OLAM International Limited, Al Rajhi International for Investment Company and Abdul Aziz Al Ajlan & Sons Company for Commercial and Real Estate Investment.
| Element List | Explanation |
|---|---|
| Introduction | Referring to the announcement made by the National Agricultural Development Company (NADEC) on Tadawul's website on Wednesday, dated 26/04/1443 H, corresponding to 01/12/2021 AD, regarding the completion of the acquisition deal of the Second Milling Company in Riyadh, Kingdom of Saudi Arabia ("the concerned mill") with OLAM International Limited, Al Rajhi International for Investment Company and Abdul Aziz Al Ajlan & Sons Company for Commercial and Real Estate Investment. ("the alliance members"), whereby all assets of the Second Milling Company ("the concerned mill") were transferred to Food Security Holding Company, a limited liability company ("the Company"). noting that NADEC holds a 10% share with responsibilities as per the agreement to purchase specific products from the Second Milling Company and an agreement through which NADEC provides administrative, marketing, and support services to the Second Milling Company.The company would like to inform its esteemed shareholders that, following the completion of the transfer of all assets of the Second Milling Company ("the concerned mill") to Food Security Holding Company, a limited liability company ("the Company"), the two companies was merged under the name "Second Milling Company."
The National Agricultural Development Company (NADEC) would like to announce that the Second Milling Company decided to enhance its operational capabilities by improving production, marketing, and distribution efficiency, as well as reducing expenses related to service contracts. Therefore, the shareholders have agreed to terminate previous service agreements, including NADEC's distribution and service agreements with the Second Milling Company, with a compensation payment of 10,000,000 Saudi Riyals to NADEC in exchange for the termination of the following agreements: - Distribution Agreement between the Second Milling Company and NADEC regarding retail products exclusively sold and delivered by the Second Milling Company to NADEC. - Service Agreement between the Second Milling Company and NADEC regarding the marketing services and services related to the marketing of the milling company's products. As part of the shareholders agreement, NADEC has increased its ownership stake in the Second Milling Company and signed an agreement to purchase 2,500,000 shares, representing 4.87% of the capital of the Second Milling Company, from Al-Ajlan Sons for Commercial and Real Estate Investment after the transfer of shares from the OLAM International Limited. Consequently, the ownership percentages of the shareholders in the Second Milling Company after the completion of the purchase will be as follows: - Al-Ajlan Sons for Commercial and Real Estate Investment: 50.13% - Al Rajhi International for Investment Company: 35% - NADEC: 14.87% Noting that the total purchase value of the shares at the time of the transaction is 40,294,921 Saudi Riyals. The purchase value for the new shares is calculated at the same price as the purchase price of Al-Ajlan Sons for Commercial and Real Estate Investment for each share of the OLAM International Limited, including administrative and legal fees, financing costs, and tax and zakat liabilities arising from the sale transaction, with Al-Ajlan International Group. The buyer will bear all tax or zakat liabilities that may arise later as a result of the transaction, as stipulated in the agreement. The agreements also contain various terms and conditions governing the completion of the share purchase agreement and the termination of distribution and service agreements, including compliance with relevant regulatory requirements. |
| Previous Announcement | The National Agricultural Development Company (NADEC) announces recent developments relating the final agreements pertaining to the acquisition process of the Second Milling Company with OLAM International Limited, Al Rajhi International for Investment Company and Abdul Aziz Al Ajlan & Sons Company for Commercial and Real Estate Investment. |
| Date of Previous Announcement on Tadawul's Website | 2021-12-01 Corresponding to 1443-04-26 |
| Percentage of fulfilled achievement | Does not apply |
| Event's Expected Completion Date | Does not apply |
| Reasons for Exceeding the Announced End Date | Does not apply |
| The costs associated with the event, and if they have changed or not with indication of the reasons. | Does not apply |
| Impact of the Delay on the Company's Financial Results | Does not apply |
| Additional Information | NADEC would like to note the presence of a related party, Sulaiman Al Rajhi Holding Company, represented on NADEC's board of directors by Mr. Badr Al Sayyari, based on Sulaiman Al Rajhi Holding Company's ownership stake in Al Rajhi International Investment Company.
"The financial impact resulting from the stock purchase and the settlement of service agreements is expected to be reflected in the financial results for the fourth quarter of 2023. NADEC will announce any significant developments in this regard at the appropriate time. |
Comments