Senaat submits offer to combine NPCC and NMDC

Proposed transaction would create one of the MENA region’s largest integrated oil & gas and marine services EPC players

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Abu Dhabi’s General Holding Corporation (Senaat), along with other minority shareholders of National Petroleum Construction Company (NPCC) has submitted an offer to the board of National Marine Dredging Company (NMDC), a regional specialist in dredging and marine construction, seeking a merger between the two firms.

According to a WAM report, the proposed transaction would ‘create a new national and regional integrated EPC champion with an established footprint in key markets within the Middle East and North Africa, MENA, and South Asia’.

The combined group would be one of the largest integrated oil & gas and marine services EPC players in the MENA region with integrated 2019 revenue of $2.416 billion.

“It is the intention to maintain NMDC’s existing listing, positioning the combined group as one of the largest companies on the Abu Dhabi Securities Exchange, ADX, which is expected to have a positive impact on overall demand and liquidity for the combined group’s shares,” according to a joint press release.

Senaat and other minority shareholders of NPCC are proposing to transfer the entire issued share capital of NPCC to NMDC. In consideration for the issued share capital transfer, NMDC would issue to Senaat and other minority shareholders of NPCC a convertible instrument, convertible into 575,000,000 ordinary shares in the combined group upon closing of the transaction. The price at which the convertible instrument will convert into shares in NMDC is AED4.40 per share. The offer implies an equity value of NMDC of $299.4 million.

Khalifa Sultan Al Suwaidi, Chief Investment Officer at ADQ and Chairman of Senaat, commented: “As one of the largest pan-regional EPC players, this transaction will create a larger, more diversified and financially flexible national champion. By bringing together two highly complementary businesses, we will be able to successfully drive increased growth while showcasing the very best of Abu Dhabi and its industry-leading capabilities on the global stage.

“We are excited about the significant opportunity that can be created via this transaction, driving performance and growth to generate value not only for shareholders, but the UAE as a whole. Subject to completion of the transaction, ADQ and Senaat will also consider increasing the free float of the combined group through a follow-on public offering at a later date,” he continued.

“If NMDC’s Board recommend the offer, and its shareholders vote in favour, then the transaction could close towards the end of 2020, subject to the receipt of all required regulatory approvals.

Moelis & Company is acting as financial advisor to ADQ, while Allen & Overy LLP are acting as its legal advisor.

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