Saudi Arabian Fertilizer Company (SAFCO) announces signing non-binding Memorandum of Understanding (MoU) with SABIC
11/04/2018
ELEMENT | EXPLANATION |
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Introduction | SAFCO announces signing a non-binding Memorandum of Understanding (MoU) with (SABIC) on Thursday evening 1/11/2018 . The MoU defines the Principles of cooperation between the two parties regarding SAFCO acquisition of SABIC's investments in the affiliates that produce agri-nutrients and some relevant products |
Signing date of the memorandum | 2018-11-01 Corresponding to 1440-02-23 |
Signed party | Saudi Basic Industries Corporation - SABIC |
Memorandum Subject | Principles of cooperation between the two parties regarding SAFCO acquisition of SABIC's investments in the affiliates that produce agri-nutrients and some relevant products |
Memorandum Duration | 18months from date of signing the MoU |
Related Parties |
SABIC is a Saudi joint stock company listed on the Saudi Stock Exchange. It was established in 1976 with a capital of SR (30,000) million. It owns 50% of Ibn Al-Baytar and SABIC owns 42.99% of SAFCO. The General Organization for Social Insurance (GOSI) is a major shareholder in (SAFCO) and owns (10,54%) of its shares. Also, (GOSI) is a major shareholder in (SABIC ), and owns ( 5,7 %) of its shares. |
Financial Impact | Nil |
Additional Information |
The MoU outlines the principles of cooperation between the two parties and contains the following key principles: First: SABIC is taking the necessary steps to establish a limited liability company under the name of SABIC Agri-Nutrients Investments Company – wholly owned by SABIC. The new company owns SABIC's investments in the affiliates that produce Agri-nutrients and some relevant products, referred to in the table attached to this announcement Second: Following completing the transfer of ownership of the investments, referred to in “First” above to SABIC Agri-Nutrients Investments Company, both SABIC and SAFCO will arrange for an agreement on how to evaluate SABIC Agri-Nutrients Investments Company Third: In the event of an agreement between the two parties on the value of SABIC Agri-Nutrients Investments Company, SAFCO will make an offer to buy SABIC Agri-Nutrients Investments Company in cash or against issuing shares for SABIC in SAFCO by increasing its capital, or by both – after completion of the relevant regulatory approvals On the other hand, The two parties agreed on a number of basic principles and preconditions for the implementation of the transaction, including conducting legal, financial and technical due diligence, appointing the competent consultants to do so, studying the evaluation, completing the contractual negotiations and obtaining the necessary preliminary approvals. In addition, SAFCO emphasizes that the signing of the Memorandum of Understanding has no significant financial impact and is not a final agreement on the potential deal. Also, it does not constitute an offer or a firm intention to make a presentation by SAFCO to SABIC. This Memorandum is a non-binding agreement entered into for the purpose of cooperation between the two companies on the verification work referred to in this announcement. In addition, If SAFCO buys SABIC Agri-Nutrients Investments Company, SAFCO will follow all relevant regulatory instructions and procedures |