Almarai expansion: Share capital to rise 50%

Almarai Company is planning to boost its share capital from SR4,000 million to SR6,000 million, an increase of 50 percent, by issuing 200 million shares totally for SR2,000 million.
This will increase the number of shares from 400 million shares to 600 million shares through the distribution of one bonus share for every two outstanding shares for existing shareholders at the end of trading day of the extraordinary general assembly meeting set in September.
It will be funded from retained earnings as of March 31, 2013, by giving the correct number of shares for each outstanding, and collect all the fractions into one portfolio for selling them in the market, according to a statement posted on the Tadawul website.
The reason for this increase is that Almarai Company aims to adjust its share capital with its assets and hence support the company’s five-year investment plan of SR15.7 billion.
This program will cover the expansion needs in all areas of farming, manufacturing, distribution and logistics.
The plan is one of the subjects on the agenda for approval at the extraordinary general assembly meeting called by the board of directors of Almarai Company, a Saudi joint stock company, which is being held in Riyadh at 7 p.m. on Sept. 9, according to Tadawul website.
Almarai seeks to amend article 6 of its bylaw.
The amendment reads: The share capital of the company will be SR6,000,000,000, divided into 600,000,000 registered shares of equal value of SR10 each.
The company seeks to approve the issuance of sukuk in compliance with Shariah principles, whether in part or several parts, through the issuance of one or a series of issuance from time to time, with the amounts and terms set by the company as per the board of directors’ approval without referring to the general assembly of shareholders on this matter, and with a condition that this instrument does not exceed the value of the company’s capital.
Among other things, the company seeks to authorize the board of directors to take all necessary measures to issue such sukuk once the necessary approvals from the relevant authorities are received.
The board may delegate any or all of its authorization, as per the stated resolutions, to any person or persons who may then also delegate this authorization.
The agenda also includes:
To approve and rectify all works, transactions and agreements (including any documents, notice or certificates) which were concluded by the board of directors or any authorized person by the board, relating to the amendment and restatement of the murabaha financing agreement dated Aug. 10, 2009, between Al-Etisalat Al-Mutanakilah Al-Saudia Company (Zain KSA) as purchaser and Banque Saudi Fransi (BSF) as investment agent in connection with the company’s shareholding in Zain KSA including:
a) a confirmation agreement between, among others, Almarai Company and BSF as the security agent, pursuant to which, among other things, the company confirmed that the pledge of its shares in Zain KSA continues to be in full force and effect;
b) a side letter to the shareholder loan agreement between the Almarai and Zain KSA, pursuant to which the company confirmed that outstanding amounts under its shareholder loan agreement will continue to be subordinated; and
c) a subordination deed between, among others, the Almarai and BSF as the security agent, pursuant to which, among other things, Almarai extended the subordination of its shareholder loan to the facility made available under the murabaha financing agreement.
In addition to the full powers delegated to the board of directors, the managing director, or the CEO to conclude or enter into any agreements or documents to be concluded by the company in its capacity as a partner in Zain Saudi Arabia Co., the board of directors may delegate all or part of its authorities to any of its members or to others.
As per article 27 of the company’s articles of association, each shareholder owning 20 shares or more will have the right to attend the extraordinary general assembly meeting, whether in person or by proxy.
Shareholders may also vote on the extraordinary general assembly meeting agenda via e-voting (electronic voting).
Start of e-voting is to be announced on Tadawul website in due course.