The allotment and issuance of the subscription shares to PIF will confer on PIF a majority of voting rights and rights to distributions in Depa
Depa has announced that it has entered into a subscription agreement with Saudi’s Public Investment Fund (PIF). The deal sees PIF invest $41m in the Dubai company in return for allotment of 750m new Class A shares. The deal will also see a restructuring of Depa’s board, which will increase the number of directors from five to 11 – with the six newly-appointed directors to be nominated by PIF.
As part of the transaction there will be a warrant instrument issued to PIF, whereby certain payments relating to tax and/or DSG will allow PIF to exercise the Warrant Instrument and receive up to 272,829,158 additional Class A shares, said Depa in its filing to Nasdaq Dubai.
The warrant instrument may be exercised up to 18 months following the completion of the transaction. If the warrant instrument is exercised in full, PIF’s shareholding and voting rights may increase up to approximately 62.5% of the enlarged share capital. The subscription shares will rank pari passu in all respects (including as to voting rights and rights to distributions) with the existing issued ordinary shares of Depa, the firm noted.
The allotment and issuance of the subscription shares to PIF will confer on PIF a majority of voting rights and rights to distributions in Depa, representing in each case approximately 55% of the total of such rights.
“This transaction provides an exciting opportunity for us. The share issuance provides a much-needed boost to the group’s liquidity position, which will afford Depa with a platform for its expansion plans in the region, particularly in Saudi Arabia. In addition, Depa’s long term strategic prospects are also enhanced by the proposed partnership with PIF in its key market going forward. The board of directors are delighted to unanimously recommend this transaction to the shareholders of Depa,” said Abdullah Al Mazrui, non-executive chairman of Depa.
Depa noted that the transaction has already received the requisite waivers and consents from DFSA, on the condition that certain matters to be proposed at an extraordinary general meeting of Depa in connection with the Transaction are duly approved. The subscription shares will not initially be listed on Nasdaq Dubai, however it is expected that an application will be made in the near future to admit the subscription shares onto Nasdaq Dubai, it stated.
The transaction will provide the interior design group with the support of a strategic partner in Saudi Arabia, which was identified during its strategic review completed in 2020 as a key growth market for the Depa Interiors, Carrara, and Deco businesses. The increased liquidity resulting from the transaction will allow Depa to better execute its expansion plans, particularly in Saudi Arabia, the firm concluded.