Saudi Basic Industries Corporation (SABIC) announces the latest development with respect to the Memorandum of Understanding signed with the Saudi Arabian Fertilizer Company (SAFCO)
| Element List | Explanation |
|---|---|
| Introduction | Further to the announcement made by SABIC on Tadawul website dated 26/02/1440H. (corresponding to 04/11/2018G) with respect to signing a non-binding memorandum of understanding with SAFCO, SABIC announces entering into a share purchase agreement with SAFCO dated 28/04/1441H. (corresponding to 25/12/2019G) pursuant to which SAFCO will acquire 100% of the share capital of SABIC Agri-Nutrients Investment Company (SANIC). The SABIC Agri-Nutrients Investment Company owns 50% of the issued share capital of both the National Chemical Fertilisers Company (Ibn Al Baytar) and Al Jubail Fertilizer Company (Al Bayroni) and 33.33% of the issued share capital of Gulf Petrochemical Industries Company (GPIC). The parties agreed not to include at this stage SABIC’s share in both Ma’aden Phosphate Company and Ma’aden Wa’ad Al Shamal Phosphate Company, which were previously referenced in the non-binding memorandum of understanding. This agreement comes as a result of the shared vision by SABIC and SAFCO, to enhance and improve efficiencies through consolidation and realization of synergies. It also envisages considerable opportunities for growth and development of competitive advantages in the global marketplace. SABIC aims to grow its shareholder’s value by providing global growth opportunities, enhancing capabilities and technical advances through global market reach. |
| Previous Announcement | Signing a Non-binding Memorandum of Understanding with SAFCO |
| Date of Previous Announcement on Tadawul's Website | 2018-11-04 Corresponding to 1440-02-26 |
| Progress | Not applicable |
| Event's Expected Completion Date | The agreement is binding and conditional upon obtaining approval of the relevant authorities and of SAFCO’s shareholders at an extraordinary general assembly’s to increase the share capital by way of acquiring the SABIC Agri-Nutrients Investment Company. |
| Reasons for Exceeding the Announced End Date | Not applicable |
| Expenses Related to the Event, Whether They Changed or Not and Justification | Not applicable |
| Impact of the Delay on the Company's Financial Results | Not applicable |
| Additional Information | For the purposes of valuing the shares in SANIC, various valuation methods were used including the discount cash flow methodology and the comparable company multiples. The total value of shares in SANIC is set at SAR 4,592,171,837, the consideration paid for which will be by issuing 59,368,738 ordinary new shares in SAFCO to SABIC valued at SAR 77.35 per share. The number of new shares to be issued by SAFCO has been calculated on the basis of the three-month volume weighted average price as at closing on 22/4/1441H (corresponding to 19/12/2019G). SABIC’s ownership in SAFCO post this transaction will increase from 42.99% to 50.1%. This transaction is deemed a related party transaction because the SPA has been entered into between SABIC and its subsidiary SAFCO. SABIC is a board member in SAFCO represented by Mr Yousef Abdullah Al Benyan, Engineer Yousef Abdulrahman Al Zamil and Engineer Anas Yousef Kentab. |
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