Savola Group Announces the Signature of a binding Share Sale Agreement of its Shares in Knowledge Economic City Company and Knowledge Economic City Developers Company Limited for an amount of SAR 459.26 million

Element ListExplanation
Introduction Savola Group owns a total shareholding of 11.47 % in Knowledge Economic City Company directly and indirectly (direct shareholding of 6.40% and in direct shareholding of 5.07% through Knowledge Economic City Developers (LLC)), the said Share Sale Agreement will include the sale of shares owned by the Group in both Knowledge Economic City Company and Knowledge Economic City Developers Company Limited.
Transaction Details On 10/08/2022 Savola Group signed a binding Share Sale Agreement with Taiba Investments Company to sell its entire shares in both Knowledge Economic City Company and Knowledge Economic City Developers Company Limited.
Transaction Value The transaction total value will be amounted to SAR 459,256,000.
Transaction Terms The completion of this transaction will be subject to a number of conditions precedent including obtaining the necessary approval of the regulatory authorities or contractual parties, as well as the authorization of the General Shareholders Assembly of both Savola Group and Taiba Investments Company due to the existence of an indirect interest for some of the Board members (related parties) in this transaction. However, in case the two parties were unable to obtain any of the required approvals to complete this transaction or if they were unable to fulfill any of the legal procedures and conditions precedent within (120) days from the date of the agreement signature, the two parties may, either cancel the transaction and terminate this agreement, or extend it for an additional period, or partially cancel the transaction based on a written agreement.

Furthermore, the Agreement includes ordinary warranties and undertakings provided by both parties.

Parties of the Transaction 1. Savola Group

2. Taiba Investments Company

Transaction Funding Method Not applicable, as Savola is the Seller
Transaction Execution Date 2022-08-10 Corresponding to 1444-01-12
Description of the Business of the Asset forming the Subject Matter of the Transaction Shares owned by Savola Group in share capital of both Knowledge Economic City Company and Knowledge Economic City Developers Company Limited
Asset Book Value The book value of the total owned shares (direct and indirect) as per the latest unaudited financial statements of Savola Group for the period ended on 31st March 2022 amounted to SAR 376 million.
Financial Statements for the Last Three Years of the Asset forming the Subject Matter of the Transaction Not applicable as the sold asset is shares in Knowledge Economic City Company, which is a publicly listed company, and its financial statements of more than three years back are disclosed and available via Tadawul website. In addition, KECD is a special purpose entity (SPV), that does not have any activity other than holding an investment in KEC.
Transaction reasons Exiting from the Savola Group's investment in the non-core sectors in light of its declared strategy to focus on investing in its main operations in the food and retail sectors.
Expected Impact of the Transaction on the Company and Its Operations Upon completion, the transaction is expected to generate cash inflows amounting to SAR 459.26 million. The overall gain on sale of this investment, amounting to approximately SAR 80 million, will be recorded in total comprehensive income.
Details of Using The Proceeds of the Asset Sale The proceeds of the transaction will be utilized in financing and supporting the Group operations in line with its adopted and declared focused strategy.
Related Parties 1) Mr. Bader Abdullah Alissa – Vice Chairman.

2)Mr. Mohammed Ibrahim Alissa – Board Member.

3) Eng. Mutaz Qusai AlAzzawi – Board Member.

4) Assila Investment Company (a Substantial Shareholder)

Additional Information This step comes in line with the Group strategic direction to focus on investments in the food and retail sectors and exit from its non-core investments in suitable time.

It is worth noting that there is a ban in trading on the founders’ shares in Knowledge Economic City Company unless the sale is made to a founder or an institutional investor; therefore, and as Taiba Investments Company is one of the founders of Knowledge Economic City Company, Savola does not expect any restrictions that will hinder the transaction execution.

The execution process will start immediately after the signature, and any material developments regarding this agreement will be announced once occurred.

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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