Dubai-based publicly-listed interior construction and manufacturing firm, Depa has entered into a definitive subscription agreement with Saudi Arabia’s sovereign wealth fund, Public Investment Fund (PIF), whereby it will make a cash investment of $40.84 million in return for a majority stake.
To effect the transaction, Depa will issue the PIF with 750 million newly issued Class A shares. The deal is expected to provide PIF with a 62.5 percent stake in Depa.
The deal allows Depa to enter Saudi Arabia, identified as a key growth market, with the support of a strategic partner. Further, the investment will enable the Dubai-based company to better execute its expansion plans.
The transaction will include a restructuring of Depa’s Board of Directors, which will increase the number of directors from 5 to 11, with the six newly appointed directors to be nominated by PIF. Depa is listed on Nasdaq Dubai and has been associated with signature projects such as the Burj Khalifa.
Abdullah Al Mazrui Chairman – Depa
“This transaction provides an exciting opportunity for Depa. The share issuance provides a much-needed boost to the group’s liquidity position, which will afford Depa with a platform for its expansion plans in the region, particularly in Saudi Arabia. In addition, Depa’s long-term strategic prospects are also enhanced by the proposed partnership with PIF in its key market going forward. The Board of Directors is delighted to unanimously recommend this transaction to the shareholders of Depa.”
The transaction has already picked up the requisite waivers and consents from Dubai Financial Services Authority (DFSA), on the condition that certain matters are to be proposed at an extraordinary general meeting of Depa in connection with the transaction are duly approved.
As part of the transaction, there will be a warrant instrument issued to PIF whereby certain payments relating to tax will allow the sovereign wealth fund to exercise the instrument and receive up to 2.72 million additional Class A shares.
The warrant instrument may be exercised up to 18 months following the completion of the transaction. If the instrument is exercised in full, PIF’s shareholding and voting rights may increase up to approximately 62.5 percent of the enlarged share capital.
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