Saudi Arabian Mining Company ("Maaden") announces the signing of a Share Purchase and Subscription Agreement for the acquisition of the entire shareholding in each of Maaden Bauxite and Alumina Company and Maaden Aluminium Company by way of a cash payment and a capital increase by issuing new shares in Maaden.
| Element List | Explanation |
|---|---|
| Introduction | Saudi Arabian Mining Company (Maaden) announces the signing of a Share Purchase and Subscription Agreement on 12/3/1446H (corresponding to 15/09/2024G) (the "SPSA") between Maaden, Alcoa Corporation (as the "Guarantor"), AWA Saudi Limited ("Seller 1") and Alcoa Saudi Smelting Inversiones S.L ("Seller 2", and together with Seller 1, the "Sellers"), (the Guarantor, the Sellers and Maaden, each a "Party" and collectively, the "Parties"), pursuant to which Maaden has agreed to acquire all of the shares held by Seller 1 in Maaden Bauxite and Alumina Company ("MBAC"), being (128,010,000) ordinary shares, representing twenty five point one per cent. (25.1%) of the entire issued share capital of MBAC, and all of the shares held by Seller 2 in Maaden Aluminium Company ("MAC") being (165,001,125) ordinary shares, representing twenty five point one per cent. (25.1%) of the entire issued share capital of MAC (collectively, the "Sale Shares") (the "Acquisition").
MBAC is a limited liability company incorporated under the laws of the Kingdom of Saudi Arabia, which operates in mining bauxite and refining it to produce alumina. MBAC's authorized share capital is (SAR 5,100,000,000), consisting of (510,000,000) equal ordinary shares, with nominal value of SAR 10 per share, of which Maaden currently owns (381,990,000) ordinary shares, representing (74.9%) of the entire issued share capital of MBAC. MAC is a limited liability company incorporated under the laws of the kingdom of Saudi Arabia, which operates in smelting, and casting aluminum and its alloys, and non-ferrous metals casting. MAC's current share capital is (SAR 6,573,750,000), consisting of (657,375,000) equal ordinary shares, with nominal value of SAR 10 per share, of which Maaden currently owns (492,373,875) ordinary shares, representing (74.9%) of the entire issued share capital of MAC. Pursuant to the SPSA, the Guarantor has agreed to guarantee the financial and performance obligations and liabilities of the Sellers when they become due for performance in accordance with the terms of the SPSA. Based on a valuation of (SAR 4,125,000,000), the Acquisition consideration will consist of a cash payment by Maaden to Seller 1 of (SAR 562,500,000) (the "Cash Consideration"), with the remaining Acquisition consideration of (SAR 3,562,500,000) being paid through the issuance of new shares in Maaden to the Sellers (or any affiliate(s) of the Sellers designated by the Sellers to Maaden), calculated on a formula based on the volume-weighted average price (VWAP) of the shares of Maaden, and representing approximatively two point twenty-one per cent. (2.21%) of the share capital of Maaden after completion of the Acquisition. Maaden has previously entered into a share purchase and subscription agreement with Mosaic Company (the "Mosaic Guarantor") and Mosaic Phosphates B.V. (the "Mosaic Seller") on 29/04/2024G (corresponding to 20/10/1445H), as announced on Tadawul on 21/10/1445H (corresponding to 30/04/2024G), pursuant to which Maaden has agreed to purchase (210,937,500) shares of Maaden Wa’ad Al Shamal Phosphate Company ("MWSPC") representing twenty five per cent. (25%) of the share capital of MWSPC in exchange for Maaden issuing (111,012,433) new shares in the capital of Maaden (the "Mosaic Capital Increase") to the Mosaic Seller or its designated affiliate (the "Mosaic Acquisition"). The Mosaic Capital Increase will occur prior to the completion of the Acquisition and will result in the share capital of Maaden increasing from (SAR 36,917,734,380) to (SAR 38,027,858,710) by issuing (111,012,433) new shares with a par value of ten Saudi Riyals (SAR 10) per share to the Mosaic Seller (or any affiliate of the Mosaic Seller designated by the Mosaic Seller to Maaden), thus increasing the number of Maaden's shares from (3,691,773,438) ordinary shares to (3,802,785,871) ordinary shares. The Acquisition will be completed subsequent to the Mosaic Capital Increase having been completed, subject to the satisfaction of all regulatory and other conditions required to complete the Mosaic Acquisition. At completion of the Acquisition, the share capital of Maaden will be increased from (SAR 38,027,858,710) to (SAR 38,887,634,176) by issuing (85,977,547) new ordinary shares with a par value of (SAR 10) per share (the "New Shares") in favour of the Sellers (or any affiliate(s) of the Sellers designated by the Sellers to Maaden), thus increasing the number of its shares and (3,802,785,871) ordinary shares to (3,888,763,418) ordinary shares, representing an increase of approximatively (two point twenty six per cent. (2.26%)) in Maaden’s share capital prior to the issuance of the New Shares (the "Capital Increase"). At completion of the Acquisition, Maaden’s percentage ownership of the share capital of both MAC and MBAC will increase from seventy-four point nine per cent. (74.9%) to one hundred per cent. (100%) while the percentage of direct and indirect ownership by the Sellers in Maaden will be equal to approximately two point twenty-one per cent. (2.21%). |
| Date of Signing the Agreement | 2024-09-15 Corresponding to 1446-03-12 |
| Name of (the Acquired Company)/(Asset to be Purchased) | Twenty-five point one percent. (25.1%) of the issued capital of each of MAC and MBAC, being one hundred twenty-eight million and ten thousand (128,010,000) ordinary shares of MBAC and one hundred sixty-five million one thousand and one hundred and twenty-five (165,001,125) ordinary shares of MAC. |
| Value of (The Company to be Acquired)/(The Asset to be Purchased) | The total value of the Sale Shares is four billion one hundred and twenty-five million Saudi Riyals (SAR 4,125,000,000). |
| Value of the listed company | The valuation of Maaden shares as of 12/3/1446H (corresponding to 15/09/2024G), calculated on a formula based on the volume-weighted average price (VWAP) of the shares of Maaden, represents an equity value of one hundred fifty-seven billion five hundred sixty-nine million three hundred forty-five thousand and two hundred thirty-three Saudi Riyals (SAR 157,569,345,233) at forty-one point forty-three fifty-two four Saudi Riyal (SAR 41.43524) per share. |
| Capital before Increase | Thirty-eight billion twenty-seven million eight hundred fifty-eight thousand seven hundred and ten Saudi Riyals (SAR 38,027,858,710). |
| Number of Shares before Increase | 3802785871 |
| Value of capital increase | Three billion five hundred sixty-two million and five hundred thousand Saudi Riyals, (SAR 3,562,500,000) being paid through the issuance of the New Shares to the Sellers (or any affiliate(s) of the Sellers designated by the Sellers to Maaden), and a cash payment by Maaden to Seller 1 of the Cash Consideration being five hundred sixty-two million, five hundred thousand Saudi Riyals (SAR 562,500,000). |
| Capital Increase Percentage (%) | 2.21 % |
| Capital After Increase | Thirty-eight billion eight hundred eighty-seven million six hundred and thirty-four thousand one hundred and seventy-six Saudi Riyals (SAR 38,887,634,176). |
| Number of Shares After Increase | 3888763418 |
| Share Exchange Equation (Ratio) | Not applicable. |
| Potential Effects or Risks for Issuing such Shares on the Shareholders of the Current Company, the Company, and Decision Making thereon | Upon the completion of the Acquisition, Maaden’s percentage ownership in the share capital of each of MAC and MBAC will increase from seventy-four point nine per cent. (74.9%) to one hundred per cent. (100%), and the percentage of direct and indirect ownership by the Sellers (and any or any affiliate(s) of the Sellers designated by the Sellers to Maaden) in Maaden will be equal to approximately two point twenty-one per cent. (2.21%). The ownership of the Maaden shareholders as of the date of the completion of the Mosaic Acquisition will decrease from one hundred per cent. (100%) to ninety-seven point seventy-nine per cent. (97.79 %). This will not result in any change in the number of shares owned by Maaden's shareholders at the time of the completion of the Acquisition. |
| Listed Company's Ownership Percentage in (Company to be Acquired)/(Asset to be Purchased) after the Issuance of Shares (%) | 100 % |
| Ownership Percentage of Shareholders to Whom New Shares will be Issued after Conclusion of the Acquisition (%) | 2.21 % |
| 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, and including other regulatory approvals (as applicable), and the extraordinary general assembly of Maaden.
The SPSA includes customary fundamental warranties given by each Party and tax warranties given by the Sellers.
Maaden shall be the sole shareholder of MAC and MBAC after the completion of the Acquisition.
Pursuant to the SPSA, the Sellers are subjected to a lock-up period of up to five (5) years commencing from the date of the completion of the Acquisition (the Completion Date"). Following the third anniversary of the Completion Date, the Sellers may, directly or indirectly, transfer or dispose a fixed number of the New Shares without the prior written consent of Maaden, which shall increase to an amount up to all of the New Shares following the fifth anniversary of the Completion Date, , in accordance with the terms of the SPSA.
The Sellers retain the right to enter into certain hedging and derivative instruments pursuant to the SPSA notwithstanding the lock-up of the New Shares.
All relevant details with respect to the lock-up and any related provisions, as well as the mechanism for the Seller's exit from ownership of Maaden's shares will be disclosed in Maaden’s shareholders’ circular upon its publication.
Maaden will announce any material developments in respect of the Acquisition (as the case may arise).
Maaden has appointed SNB Capital Company as the financial advisor and AS&H Clifford Chance law firm as the legal advisor in relation to the Acquisition. |
| Related Parties | The Transaction does not involve any related parties. |
| The expiry date of the agreement | Either Maaden or the Sellers may terminate the SPSA in the event that completion has not occurred within twelve (12) months after the date of signing the SPSA, 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 Maaden or the Sellers at the occurrence of certain events, including (without limitation) if there is a breach by any 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 in respect of the shareholders' circular, the Capital Increase and the issuance of the New Shares.
2- Obtaining the approval of the Saudi Stock Exchange (Tadawul) to list the New Shares resulting from the Capital Increase.
3- Receipt of all anti-trust approvals or clearances required for the Acquisition.
4- Obtaining the approval of the extraordinary general assembly of Maaden, in accordance with Maaden’s bylaws and the provisions of the Companies Law and the Rules on the Offer of Securities and Continuing Obligations.
5- Obtaining the approval of the Ministry of Commerce of Maaden's amended and restated bylaws (including the publication of such bylaws) and its updated commercial registration certificate.
6- No authority of a competent jurisdiction with respect to certain specified activities, including antitrust matters, having enacted any law, order, injunction, judgment or decree to prohibit the Acquisition or make it illegal. |
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