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United Wire Factories Company Announces the Execution of a Non-Binding Agreement in connection with the Acquisition of forty percent (40.0%) of Issued Shares in Al Raeda Industrial Investment Company, in return for Issuing New Shares for the Selling Shareholders of Al Raeda Industrial Investment Company in United Wire Factories Company
| Element List | Explanation |
|---|---|
| Introduction | With reference to United Wire Factories Company's ("ASLAK" or the "Company") announcement dated 30/04/1445H (corresponding to 14/11/2023G) in relation to signing a non-binding memorandum of understanding ("MOU") with Al Raeda Industrial Investment Company (the “Target Company” or "AL RAEDA"), and ASLAK is pleased to announce the execution of a Non-Binding Agreement (the "Non-Binding Agreement") to acquire forty percent (40.0%) of issued shares in AL RAEDA in return for issuing new shares for the selling shareholders of AL RAEDA in ASLAK (the "Contemplated Transaction") in connection with the Proposed Transaction. On this basis, both ASLAK and AL RAEDA have agreed to proceed with the relevant due diligence in relation to the Contemplated Transaction. Subject to the final valuation of AL RAEDA and the results of the relevant due diligence exercise, ASLAK and AL RAEDA will agree on the exchange ratio (the "Exchange Ratio"), where Exchange Ratio is defined as the newly issued shares in ASLAK that will be received by the selling shareholders of AL RAEDA for every sale share they own in AL RAEDA. In the context of the Exchange Ratio, the valuation of ASLAK shares for the purpose of the Contemplated Transaction was fixed at SAR [29.7] per share, which was calculated based on the daily volume-weighted average price (VWAP) for the last sixty (60) trading days (Last Sixty - Trading Days) from the execution date of the Non-Binding Agreement. |
| Date of signing the Memorandum of Understanding | 2024-12-31 Corresponding to 1446-06-30 |
| Memorandum Duration | Six (6) months from the execution date of the Non-Binding Agreement, to be mutually extended by both Parties for an agreed new period. |
| Name of the Counterparty | Al Raeda Industrial Investment Company, a Saudi closed joint stock company |
| Name of Financial Advisor of Each Party | No financial advisor has been appointed at this stage. ASLAK will later announce any developments about the appointment of its financial advisor. |
| Major Terms in the Memorandum | Both parties agreed on a number of terms and conditions, including certain business restrictions on AL RAEDA from the execution date of the Non-Binding Agreement, a number of warranties and indemnities, the manner of completing the Contemplated Transaction, in addition to other usual terms and conditions. |
| Related Parties | The Contemplated Transaction does not involve related parties. AL RAEDA is not a related party to ASLAK. |
| Actions to be Taken by the Company during the Memorandum’s Duration | ASLAK intends to conclude the due diligence process and sign the definitive agreements in connection with the Contemplated Transaction, if both parties agree to its final terms, as soon as practicable. |
| Approvals | The Transaction is subject to the approval of the relevant regulatory authorities, the approval of the extraordinary general assembly of Aslak to increase the capital for the purpose of acquisition, and the approval of the ordinary general assembly of Alraeda on the Transaction, as follows: 1. The approval of the Capital Market Authority in relation to Aslak’s capital increase application. 2. The approval of the Saudi Exchange to list the consideration shares. 3. The non-objection of the General Authority for Competition on the Transaction. 4. The approval of the requisite majority of Aslak shareholders on the acquisition resolutions in the Transaction’s extraordinary general assembly. 5. The approval of the requisite majority of Alraeda shareholders on the Transaction at the ordinary general assembly of Alraeda, given that it is a significant transaction under the rules of the Capital Market Authority. The Transaction is also subject to a number of conditions precedent specified in the Agreement, which include terms related to the contracts and operations of the two target companies and other conditions specified by both parties. |
| Additional Information | After obtaining the approval of the Capital Market Authority, ASLAK will publish a circular to its shareholders that includes more details about the Contemplated Transaction, business disclosures related to AL RAEDA, risk factors and other important details of the Contemplated Transaction, which shareholders should read fully and carefully when published. ASLAK will also announce any material developments in connection with the Contemplated Transaction in accordance with the applicable laws and regulations. |
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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