Budget Saudi issues shareholder circular on issuing new shares to acquire AutoWorld

United International Transportation Co. (Budget Saudi) issued today, June 5, the shareholder circular for raising capital by issuing new shares in order to fully acquire Al Jazira Equipment Co. Ltd. (AutoWorld).

The company will increase capital from SAR 711.67 million to SAR 781.67 million, through issuing seven million ordinary shares, at a par value of SAR 10 apiece.

The capital hike is aimed at taking over the entire of AutoWorld's share capital, amounting to 300 cash shares at a nominal value of SAR 1,000 each. In exchange, Budget Saudi will issue seven million new ordinary (consideration) shares, at a SAR 10/share par value.

Accordingly, the selling shareholder, Saudi Economic and Development Holding Co. (SEDCO), will secure 3.91 million new shares in Budget Saudi, while First Development Investment Co. (Tanmiyah), a wholly-owned subsidiary of SEDCO, gets the remaining 3.09 million shares.

Budget Saudi's extraordinary general meeting (EGM) will convene on June 24 to vote on the board of directors’ recommendation to increase capital by issuing new shares for the purpose of fully acquiring AutoWorld.

If the shareholders’ approval of the acquisition deal was denied, the issuance of the new shares will not take place and the transaction will be canceled, meaning this circular will be considered null. In this case, the shareholders will be notified accordingly. The number of shares making this takeover viable must represent at least three-quarters of the share capital presented at the EGM.

If the EGM agrees on the AutoWorld takeover, Budget Saudi will issue new shares to both SEDCO and Tanmiyah, amounting to 3.91 million and 3.09 million new shares, respectively. These two companies will not receive any cash consideration under the transaction.

SEDCO and Tanmiyah will also not have any direct or indirect ownership in Budget Saudi before the capital hike. However, SEDCO and Tanmiyah’s direct ownership stake in Budget Saudi will be 5% and 3.96% of the latter’s capital after the top-up, respectively. 

SEDCO's direct and indirect ownership will reach 8.96% of Budget Saudi after the capital increase. At the same time, Budget Saudi’s current shareholders will collectively hold a 91.04% stake.