Emaar EC inks share subscription agreement with PIF for part loan owed to Finance Ministry

Emaar The Economic City (Emaar EC) announced it entered into a share subscription agreement on Aug. 31, 2020 between the company, Dayim Modern Real Estate Management Co., ME Royal Capital LLC, ME Partners Capital LLC, ME Strategic Investments LLC, ME Holdings LLC, Emaar Middle East LLC and the Public Investment Fund (PIF).

The company said in a bourse statement that discussions are going on between the Ministry of Finance (MoF) and the PIF with respect to novation of part of the loan due to MoF following the loan agreement with MOF on May 23, 2011 and amended on June 4, 2015, to PIF for a total amount of SAR 2.83 billion (the novation).

The statement added that the company will make an announcement with respect to any developments with regard to the novation as they come up.

Following the subscription agreement, PIF will enter as an investor in the company through issuance of 283.33 million new shares in the company, at the nominal value of SAR 10 per share, against the entire debt owed by the company to PIF pursuant to the novation.

Dayim Modern Real Estate Management Co., ME Royal Capital LLC, ME Partners Capital LLC, ME Strategic Investments LLC, ME Holdings LLC and Emaar Middle East LLC provided warranties to PIF pursuant to the subscription agreement, the statement added.

The subscription agreement will be subject to the company completing all necessary regulatory steps in accordance with the Companies Law and the Capital Market Authority’s regulations, including obtaining the approval of the company’s general assembly.

The subscription agreement includes a number of conditions as following:

-Completion of the novation.

-Obtaining the CMA’s approval on the company’s capital hike by way of debt conversion through issuing 283.33 million new shares to PIF against the entire debt owed by the company to PIF pursuant to the novation with a total amount of SAR 2.83 billion. After increase, the company’s share capital will become SAR 11.33 billion.

- Obtaining the approval of the company’s extraordinary general assembly on the capital Increase and amendment of the company’s bylaws as a result thereof.

- Obtaining the approval of the Saudi Stock Exchange (Tadawul) on the listing of the new shares

- Obtaining necessary approval by relevant authority.

The subscription agreement, following the completion of the above-mentioned conditions, will result in the capital increase and settlement of the entire debt owed by the company to PIF pursuant to the novation amounting to SAR 2.83 billion.

The MoF notified the company of its no-objection for the company entering into the subscription agreement provided that:

-The execution of the subscription agreement will be subject to the completion of all procedures relating to the novation; and

- The capitalization of the debt is only in relation to the part of the MoF loan that will be novated to the PIF pursuant to the novation, and in a manner which will not contradict with the agreement to be entered into between the MoF and PIF in relation to the novation.

The company will announce any developments in this regard later, the statement added.

Details of share subscription agreement:

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