RIYADH: Saudi Arabian Mining Co., or Ma’aden, has issued a shareholder circular outlining the terms of its plan to raise its share capital to SR38.03 billion ($10.1 billion) from SR36.92 billion to boost its phosphate business.
The move follows an earlier announcement to acquire a 25 percent stake in Ma’aden Wa’ad Al-Shamal Phosphate Co. from Mosaic Phosphates B.V., increasing its ownership in the joint venture to 85 percent.
In April, Ma’aden announced the signing of an agreement to acquire 210.93 million shares owned by Mosaic Co. and its subsidiary, Mosaic Phosphates B.V. Regulatory approval for the transaction was granted in November by the Capital Market Authority.
In a bourse filing, Ma’aden said its shareholders will convene virtually on Dec. 11 to approve the capital increase. The plan includes issuing 111 million new ordinary shares valued at SR10 each, representing a 3.01 percent rise in the company’s share capital.
In exchange, Mosaic Phosphates will transfer its MWSPC stake to Ma’aden, aligning with the Saudi firm’s strategic expansion in the phosphate sector.
MWSPC, established in 2014 and based in Turaif, is a joint venture between Ma’aden, Mosaic Co., and Saudi Basic Industries Corp. Following the transaction, SABIC will retain its 15 percent stake while Ma’aden strengthens its position as a global phosphate leader.
Mosaic Netherlands Holding Co., a subsidiary of Mosaic Co., will receive the newly issued shares, which will be subject to a three-year lock-up period. Limited transfers will begin in the fourth year, with full tradability by the fifth year, the circular said.
The acquisition will enhance Ma’aden’s control over MWSPC, recognized as a low-cost, large-scale phosphate producer. It will also grant Ma’aden access to Mosaic’s marketing rights, a component of the deal’s valuation at SR5.62 billion.
Ma’aden expects increased earnings per share following the transaction, reflecting anticipated synergies and enhanced operational efficiencies, according to the document.
The company assured shareholders that all regulatory approvals for the transaction have been secured, with a detailed timeline for procedural steps provided in the circular.
The move underscores Ma’aden’s commitment to driving value creation in the Kingdom’s mining sector, aligning with Saudi Vision 2030 goals to diversify the economy and develop industrial capabilities.
In the first half of this year, Ma’aden achieved a net profit of SR2 billion, marking a 160 percent increase compared to the same period in 2023.
The surge in profitability was driven by several key factors. A major contributor to this financial success was the significant boost in sales volume, according to a Tadawul statement.
The company’s robust performance in primary aluminum and gold sales played a crucial role in driving up revenues. Ma’aden also benefited from reductions in raw material costs and lower depreciation expenses, which further enhanced its profitability.
Ma’aden’s performance and strategic advancements underscore its commitment to leading the mining sector and contributing to Saudi Arabia’s economic diversification goals, particularly in developing mining as a critical pillar of the Kingdom’s industry.
