To create an integrated entity in the field of engineering, procurement and construction
Presentation to unify "Petroleum Construction" and "Marine Dredging" businesses
According to the offer, the "marine bulldozers" would acquire the entire capital of the "Petroleum Construction". Archives
The General Holding Company (Senaat), which is wholly owned by the “Holding” (ADQ), and the minority shareholders of the National Petroleum Construction Company, confirmed yesterday that it has delivered an offer to the Board of Directors of the National Marine Dredging Company to unify the activities of “National Petroleum Construction” and “National Marine Dredging”. , Through the acquisition by the National Marine Dredging Company of the entire capital of the National Petroleum Construction Company.
Integrated entity
It is expected that this proposed deal will establish a pioneering and integrated national and regional entity in the field of engineering, procurement and construction, with the unified group having a firm footprint in the main markets in the Middle East, North Africa and South Asia.
The group will be one of the largest integrated companies in the field of engineering, procurement and construction in the oil and gas sector and marine services in the Middle East and North Africa region, with integrated revenues for 2019 amounting to eight billion and 875 million dirhams.
Revenue diversification
The businesses that are the subject of this transaction are complementary to each other, as the deal will provide them with broad diversification of revenue.
Through a diversified and dynamic strategy, across its product sector, customer base and geography, the unified group will become more flexible in money market cycles.
The deal aims to strengthen the current listing of the National Marine Dredging Company in the stock market, making the unified group one of the largest companies listed on the Abu Dhabi Stock Exchange, which is expected to have a positive impact on the total demand and liquidity of the consolidated group's shares.
The proposed transaction introduces more cumulative elements in favor of the consolidated group's value, including cost synergies due to economies of scale, as well as the possibility of reaching more bids.
Obsession
The main provisions of the bid - proposed by the shareholders of the National Petroleum Construction Company - stipulate that the National Marine Dredging Company will acquire the entire capital of the National Petroleum Construction Company, in exchange for the National Marine Dredging Company issuing financial instruments convertible to 575 million ordinary shares in the capital of the Marine Dredging Company. For the benefit of shareholders of the National Petroleum Construction Company.
The conversion price of the convertible into shares in the National Marine Dredging Company is 4.40 dirhams per share.
By applying the proposed transfer price to the equity value of the National Petroleum Construction Company, the value of the implied equity of the National Marine Dredging Company will be Dh1.1 billion.
Seize opportunities
By establishing this unified entity, the unified group will be ideally positioned to seize growth opportunities in the UAE and major regional markets, with its strong capabilities, across the value chain to support future expansion plans.
The deal will also create more value for shareholders by creating a platform with high potential for long-term profit distribution, as a result of its diversification, economies of scale and cost synergies.
Important opportunity
Khalifa Sultan Al Suwaidi, head of investment portfolios in the “Holding Company” (ADQ) and Chairman of the Board of Directors of the General Holding Company (Senaat), said: “As one of the largest companies operating in the field of engineering, procurement and construction in the region, this deal will create a larger and more national entity. Diversity and flexibility in terms of financially ».
He added, "By bringing together two companies that are highly complementary in terms of the nature of business, we will be able to successfully drive growth rates, and highlight the best of Abu Dhabi's leading industrial capabilities on the global stage."
"We are excited about this important opportunity that can be created through this deal, which would drive performance and growth to create more value, not only for shareholders, but for the UAE on a larger scale," Al Suwaidi added.
He said, "If this transaction is completed, the (Holding) and (Industries) also intend to increase the free circulation of the unified group by offering a public offering at a later time."
Get the deal done
If the board of directors of the National Marine Dredging Company accepts the offer, and the shareholders vote in its favor, it is hoped that the deal will be concluded by the end of this year, subject to obtaining all the required regulatory approvals and approvals.
"Molis" and Co. is responsible for providing financial advice to "Holding" (ADQ), while the "Allen Overy" limited liability company undertakes the task of providing legal advice.
The deal aims to boost the offshore dredging company’s current stock market listing.
The group is expected to become one of the largest entities with revenues of 8.8 billion dirhams.