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19 April 03:51 PM

The Saudi British Bank ("SABB") announces entry into a binding agreement with HSBC Asia Holdings B.V. for the sale of shares representing 2% of the share capital of HSBC Saudi Arabia

SAB 1060 4.63% 35.00 1.55
Element List Explanation
Announcement Detail SABB would like to announce to its shareholders that it entered into a binding agreement with HSBC Asia Holdings B.V. on 18 April 2019 for the sale of 1,000,000 shares in the share capital of HSBC Saudi Arabia (the "Shares"), representing 2% of the issued share capital of HSBC Saudi Arabia, for a total value of SAR 36,000,000 (the "Transaction"). Following completion of the Transaction, SABB will (directly and indirectly) be the owner of 49%, and HSBC Asia Holdings B.V. will become the owner of 51%, of the shares in HSBC Saudi Arabia. HSBC Saudi Arabia is an authorised person licensed by the Capital Market Authority (the "CMA") to carry out securities business activities.

The total book value of the Shares amounts to approximately: SAR 20,886,156 as of 31 December 2016, and SAR 20,585,255 as of 31 December 2017 and SAR 20,144, 235 as of 31 December 2018.

Completion of the Transaction is subject to certain agreed contractual conditions and shareholder and regulatory approvals, including the approval of the CMA.

The Transaction will allow HSBC Saudi Arabia to further benefit from the international experience of the HSBC Group. The Transaction is not expected to have a material effect on SABB’s day to day operations.

The Transaction is expected to be reflected as a profit in the financial records of SABB for the period in which the Transaction is completed. The amount of such profit will be in the order of SAR 14 million based on the financial position as at 31st March 2019.

At completion of the Transaction, SABB and HSBC Asia Holdings B.V. will also enter into an amended shareholders' agreement in respect of their ownership in HSBC Saudi Arabia (the "Shareholders' Agreement"). The amendments to be made to the Shareholders Agreement mainly relate to the governance and management of HSBC Saudi Arabia (including the board composition) and reflect the change in ownership resulting from the Transaction as a result of which SABB’s control and governance rights over HSBC Saudi Arabia will be reduced.

SABB intends to use the proceeds from the sale to support its activities generally.

It should be noted that the Transaction involves a related party of SABB, as HSBC Asia Holdings B.V. is part of the HSBC Group which is a substantial shareholder in SABB and has representation on SABB’s board. As such (and as noted above), the Transaction will be presented to the SABB general assembly for approval, in accordance with the requirements of Article 71 of the Companies Law.

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