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Riyadh Development Company announces the signing of an acquisition agreement of two real estate assets worth SAR 1.4 Billion by means of a capital increase by issuing new shares to Remat Al-Riyadh Development Company
| Element List | Explanation |
|---|---|
| Introduction | Riyadh Development Company (the "Company") announces signing of an acquisition agreement of two real estate assets with Remat Al-Riyadh Development Company (the "Seller") by means of a capital increase by issuing new shares to the Seller in exchange of its in-kind contribution of such assets (hereinafter referred to as the "Transaction Agreement") (the "Transaction"). This agreement is part of the Company's strategy to maximize total shareholder returns and expedite the achievement of its strategic objectives, which the Company has been working towards since the announcement of its strategy at the beginning of 2023 under the name "Invest for Growth." This strategy aims to solidify the Company's position in the real estate development and management sector, enhance efforts to promote the Company's operations in line with the urban and economic development in Riyadh specifically and the Kingdom generally. |
| Date of Signing the Agreement | 2024-09-01 Corresponding to 1446-02-28 |
| Name of (the Acquired Company)/(Asset to be Purchased) | The Transaction involves the purchase of two real estate assets owned by the Seller, as follows: 1. A land parcel with a total area of (787,477.19) square meters, located north of Dammam Road, Al-Rimal District, Riyadh, Kingdom of Saudi Arabia. 2. A land parcel with a total area of (214,000) square meters, located south of the Northern Ring Road, Al-Murooj District, Riyadh, Kingdom of Saudi Arabia. (hereinafter referred to as the "Seller's Properties"). |
| Value of (The Company to be Acquired)/(The Asset to be Purchased) | The total agreed value of the Seller's Properties is one billion, four hundred three million, eight hundred twenty-six thousand, and twenty-five (SAR 1,403,826,025) (exclusive of real estate transaction tax). |
| Value of the listed company | As of 25/2/1446H (corresponding to 29/8/2024G) (which is the agreed date for determining the number of the new shares), the market value of the Company is four billion, four hundred forty-four million, four hundred forty-four thousand, and four hundred twenty-five (SAR 4,444,444,425). |
| Capital before Increase | The Company’s capital, before the capital increase, amounts to one billion, seven hundred seventy-seven million, seven hundred seventy-seven thousand, and seven hundred seventy (SAR 1,777,777,770) Saudi Riyal. |
| Number of Shares before Increase | 177777777 |
| Value of capital increase | The value of the capital increase is five hundred sixty-one million, five hundred thirty thousand, and four hundred ten (SAR 561,530,410). |
| Capital Increase Percentage (%) | 31.58 % |
| Capital After Increase | Following the capital increase, the Company’s capital will amount to two billion, three hundred thirty-nine million, three hundred eight thousand, and one hundred eighty (SAR 2,339,308,180) Saudi Riyal. |
| Number of Shares After Increase | 233930818 |
| 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 Transaction, the ownership percentage of the current shareholders will decrease from 100% to 76%, which will affect their voting rights accordingly. |
| 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 (%) | 24 % |
| Additional Information or Substantial Conditions | The Transaction is subject to the fulfillment of several conditions, including (but not limited to) obtaining the necessary regulatory approvals, approval of the Transaction by the Company’s Extraordinary General Assembly, and other conditions specified in the Transaction Agreement. The Transaction Agreement also includes standard warranties provided by each party. The Company will announce any material developments related to the Transaction in due course. The Company has appointed SNB Capital as its financial advisor and AS&H Clifford Chance as its legal advisors in connection with the Transaction. |
| Related Parties | The Transaction involves a related party, as Remat Al-Riyadh Development Company (the Seller) is a related party due to the fact that the Chairman of the Board of the Company represents the Riyadh Municipality, which, in turn, wholly owns Remat Al-Riyadh Development Company (the Seller). |
| The expiry date of the agreement | The Company or the Seller has the right to terminate the Transaction Agreement if the Transaction is not completed by 31/8/2025, or any other date that may be agreed upon in writing by the parties from time to time. |
| Agreement Termination Terms | The Transaction Agreement may be terminated by either party prior to the completion of the Transaction upon the occurrence of certain events, including (but not limited to) a breach by the other party of any of its material obligations, representations, or warranties specified in the Transaction Agreement (which have not been remedied if they are subject to remedy within the time period specified in the Transaction Agreement), or if the Transaction is not completed by the date agreed upon by both parties in the Transaction Agreement, or such other date as may be mutually agreed upon in writing from time to time. |
| Approvals | 1.Obtaining the necessary non-objection from the General Authority for Competition (if required) or a certificate of non-applicability from the General Authority for Competition (if non-objection is not required). 2.Obtaining approval from the Capital Market Authority regarding the Transaction. 3.Obtaining approval from Saudi Stock Exchange (Tadawul) for the listing of the new shares resulting from the capital increase. 4.Obtaining approval from the Company’s extraordinary general assembly in accordance with the Companies Law and the Rules on the Offer of Securities and Continuing Obligations. |
| Attached Documents |  |
The Capital Market Authority and Saudi Exchange take no responsibility for the contents of this disclosure, make no representations as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this disclosure, and the issuer accepts full responsibility for the accuracy of the information contained in it and confirms, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts or information the omission of which would make the disclosure misleading, incomplete or inaccurate.
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