Riyadh Development Company Signs Acquisition Agreement for Two Real Estate Assets Worth SAR 1.4 Billion Through Capital Increase and Issuance of New Shares to Remat Al-Riyadh Development Company

logo of Riyadh Development Compan - ARDCO

Riyadh Development Company has announced the signing of a subscription and acquisition agreement with Remat Al-Riyadh Development Company today. The agreement involves the acquisition of two plots of land valued at SAR 1.4 billion through a capital increase in exchange for issuing new shares in favor of Remat Al-Riyadh Development Company Riyadh Development Company.

According to a statement received by "Argaam," the agreement aligns with Riyadh Development Company’s strategy to maximize shareholder value and achieve its strategic objectives. This investment marks a significant strategic step for both companies, opening new horizons for collaboration and creating greater value for both entities and the Riyadh region, in light of the growth opportunities in the region and the sector.

The company explained that the two plots of land cover a total area exceeding 1 million square meters and are strategically located in Riyadh, with significant service and commercial importance. This is expected to enhance the returns on the asset portfolio in the coming period.

Mr. Abdullah  Abudawood, CEO of Remat Al-Riyadh Development Company, stated: "This agreement is an important step towards strengthening the role of Remat Al-Riyadh Development Company, the developmental arm of Riyadh Municipality, in achieving one of its strategic priorities by developing attractive and innovative business models in partnership with the private sector. Through this partnership, we aim to diversify our investment portfolio and activate the company's owned assets, contributing to financial sustainability and sustainable development in Riyadh.
 

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We look forward to collaborating with a strategic partner in the sector like Riyadh Development Company, as we work together to develop innovative projects that contribute to improving the quality of life for a thriving and sustainable Riyadh."

Mr. Jehad Alkadi, CEO of Riyadh Development Company, commented on the deal: "This step reflects our ongoing commitment to maximizing total shareholder returns and expediting the achievement of our strategic goals. It is in line with the approach of forming value-added partnerships, a strategy that the company has pursued since announcing its strategy in early 2023 under the theme ‘Invest for Growth.’ This strategy aims to solidify our position in the real estate development and development management sector and enhance efforts to elevate the company's operations to keep pace with the urban and economic renaissance taking place in Riyadh and across the Kingdom. It also aligns with Riyadh City's strategic vision and supports the objectives of Vision 2030 and its aspirations for sustainable development."

It is worth noting that the agreed-upon share price is based on the closing price at the end of trading on Thursday, August 29, 2024. A total of 56,153,041 new ordinary shares will be issued, representing 24% of the capital after the increase, with a nominal value of SAR 10 per share.

This increase is subject to several conditions, including obtaining approvals from the Capital Market Authority and Saudi Tadawul, in addition to the approval of the company's extraordinary general assembly.

The company has appointed SNB Capital as the financial advisor and AS&H Clifford Chance Law Firm as the legal advisors for the transaction. Remat Al-Riyadh Development Company Riyadh Development Company has appointed PricewaterhouseCoopers (PwC) as the financial advisor and Khoshaim & Associates as the legal advisor for the deal.

The company also announced that it will disclose information upon submitting the capital increase request file to the Capital Market Authority for approval and will announce any developments regarding this matter in due course.