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Emaar, The Economic City Announces the Board’s Recommendation to Increase the Capital Through Converting the Debt of the Public Investment Fund and its Entry into the Relevant Conversion Agreement
| Element List | Explanation |
|---|---|
| Introduction | Emaar, The Economic City (the “Company”) announces the issuance of its board’s recommendation via circulation on 04 Rabi AlAwwal 1446H (corresponding to 07 September 2024G) to the shareholders to increase the Company’s capital through converting the debt of the Public Investment Fund (“PIF”), which totals (SAR 3,972,415,091), which represents the amounts due by the Company to the PIF under the shareholder loan agreement dated 28 Rajab 1444H (corresponding to 19 February 2023G) and the debt novated from the Ministry of Finance (the “MoF”) to the PIF on 02 Rabi AlAwwal 1446H (corresponding to 05 September 2024G), to new ordinary shares in the Company, and announces its entry into the related conversion agreement with the PIF on 04 Rabi AlAwwal 1446H (corresponding to 07 September 2024G) (the “Conversion Agreement”). |
| Date of Board Meeting | 2024-09-07 Corresponding to 1446-03-04 |
| The total amount of debts that the company intends to convert | SAR 3,972,415,091, representing payments and liabilities due by the Company to the PIF under the shareholder loan agreement between the parties, and the debt novated from the MoF to the PIF. The parties will agree on how to settle the accruing interest after such date and announce the same (if required). |
| Reasons for the Capital Increase | Settle the Company’s liabilities towards the PIF, and enhance the financial position of the Company and support its growth plans. |
| Approvals | The capital increase is subject to the approval of the relevant regulatory authorities and the approval of the Company’s Extraordinary General Assembly. |
| Appointment of a Financial Advisor and the Submission of the Application File for Capital Increase through Debt Conversion to CMA | SNB Capital Company was appointed on 04 Rabi AlAwwal 1446H (corresponding to 07 September 2024G) as the financial adviser in relation to the capital increase through debt conversion, and Khoshaim & Associates as the legal adviser. The Company will make an announcement when it files the capital increase through debt conversion application with the Capital Market Authority (the “CMA”), and further developments in line with the CMA’s rules. |
| Additional Information | The Company entered into the Conversion Agreement with the PIF on 04 Rabi AlAwwal 1446H (corresponding to 07 September 2024G) to regulate the parties’ agreement regarding the debt conversion, and its key terms are: - The debt conversion is subject to a number of conditions precedent, including the approvals of the relevant regulatory authorities, and the parties agreeing on the conversion rate and the approval of the Company’s Extraordinary General Assembly. - The conversion completion will be deemed a full and complete settlement of the outstanding amounts subject to conversion, under the PIF’s shareholder loan and the MoF’s loan novated to the PIF. - Each party made certain customary representations and warranties. - The agreement terminates after a year from its date or six months from agreeing the conversion rate, whichever is earlier, if the conditions precedent were not met by then. The PIF has the right to terminate the agreement before then in certain cases including material breach by the Company. - The PIF’s right to request and access certain information and documents it requires in relation to the conversion or the Company’s position, and confidentiality obligation regarding the same. The PIF is related party, as it is one of the Company’s substantial shareholders. This comes as a part of the overall capital optimization plan the Company launched, and to enhance its ability to move forward with its growth plans. |
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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