PUBLIC INVESTMENT FUND (“PIF”) AND COSCO SHIPPING PORTS LIMITED (“CSPL”) HAVE AGREED TO ACQUIRE STRATEGIC MINORITY EQUITY STAKE IN RED SEA GATEWAY TERMINAL LIMITED (“RSGT”), A SISCO SUBSIDIARY
|Announcement Detail||Saudi Industrial Services Company (“SISCO”) announces that the Public Investment Fund (“PIF”) and COSCO SHIPPING Ports Limited (“CSPL”) (through its wholly-owned subsidiary Sound Joyce Enterprises Limited) have signed separate Sale and Purchase Agreements (“SPA”) on 27 January 2021 (corresponding to 14/06/1442 Hijri) to acquire SISCO’s 21.2% direct equity stake in its subsidiary Red Sea Gateway Terminal Limited (“RSGT”) for a total consideration of SAR 556.5 million (the “Transaction”). The Transaction implies an Enterprise Value for RSGT of SAR 3.3 billion. |
Upon completion of the Transaction, PIF and CSPL will own a combined 40% equity stake (respectively 20% each) by acquiring SISCO’s 21.2% direct equity stake and 19.8% equity stake of RSGT’s other minority shareholders, on a pro rata basis. The Transaction is all secondary capital, with the proceeds distributed to the existing shareholders on a pro-rata basis.
SISCO will continue to consolidate (from an accounting perspective) RSGT, through its remaining ownership in the company.
This landmark Transaction demonstrates the strength and attractiveness of SISCO’s portfolio and strategy, both commercially and financially. It further highlights the market’s confidence in the Kingdom’s investment climate and in one of SISCO’s key assets. The Transaction also affirms SISCO’s long-standing strategy of strengthening and growing its portfolio businesses through strategic alliances and partnerships in order to enhance overall shareholder value.
SISCO’s strategic priorities remain focused on expanding its presence in its core segments of ports, logistics and water through planned development and expansion with the ultimate objective of providing long-term value to our shareholders. The Transaction is a key component of this strategy and will enable SISCO to diversify and optimise its portfolio.
For RSGT, the strategic partnership with PIF and CSPL will accelerate its growth and expansion plans. The Transaction will further enhance RSGT’s value proposition to its customers in one of the Middle East’s main Hub Ports and beyond, as a true manifestation of the Kingdom’s Vision of connecting three continents.
The completion of the Transaction is expected in H1 2021, subject to certain agreed contractual conditions, including obtaining the approval of the Saudi Ports Authority (“Mawani”) as well as other customary regulatory and third party approvals.
Advising SISCO and the other minority shareholders on the Transaction were J.P. Morgan acting as financial advisor and Legal Advisors Abdulaziz Alajlan & Partners in association with Baker & McKenzie Limited acting as legal advisor.
Any further developments in respect of the Transaction will be announced in due course.
The Capital Market Authority and the Saudi Stock Exchange take no responsibility for the contents of this disclosure, make no representations as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this disclosure, and the issuer accepts full responsibility for the accuracy of the information contained in it and confirms, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts or information the omission of which would make the disclosure misleading, incomplete or inaccurate.