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Arab News
08-04-2025
- Business
- Arab News
Saudi Arabia proposes new investment product to boost Nomu listings
RIYADH: Saudi Arabia is exploring the introduction of a new investment product in the parallel market, Nomu, to foster private sector listings through special purpose acquisition companies. The Capital Markets Authority has launched a public consultation on the proposed regulatory framework for SPACs, inviting feedback as part of its efforts to expand investment opportunities and drive market growth. This initiative seeks to address the financing needs of the economy while diversifying investment products and enhancing the depth of the capital market. Under the proposal, SPACs would be formed as joint stock companies in accordance with the provisions of the Companies Law. Their main objective would be to acquire or merge with Saudi companies that are not yet listed, in alignment with the Rules on the Offer of Securities and Continuing Obligations. In February, Fahad bin Hamdan, assistant deputy for financing and investment at the CMA, announced the authority's plans to introduce SPACs as part of its broader strategy to streamline the listing process within the Kingdom's capital market. Speaking at the Capital Markets Forum in Riyadh, Hamdan emphasized the CMA's efforts to enhance market accessibility and provide alternative pathways for companies to go public. In addition to SPACs, the CMA is also working to refine the framework for direct listings, with plans to allow such offerings on the main market, Hamdan revealed. The authority's goal is to expand the investor base in Nomu, thereby boosting supply and increasing market participation. These initiatives are part of ongoing regulatory reforms aimed at attracting both local and international investors, including collaboration with the Zakat, Tax, and Customs Authority to eliminate withholding tax on all listed securities. The authority has stated that SPACs could have a positive impact on liquidity levels by increasing the number of listings. The authority has stated that SPACs could have a positive impact on liquidity levels by increasing the number of listings. In a media release, the CMA emphasized that the proposed draft is designed to encourage private sector companies to list on the parallel market through SPACs. This, the CMA noted, would help meet the financing needs of the economy while supporting the growth and expansion of the capital market by introducing a broader range of investment products. The CMA's new public consultation on the proposed regulatory framework for SPACs outlines three key components. First, it specifies the terms for acquisitions or mergers between SPACs and target companies. Sponsors, or any affiliated investment funds, would be prohibited from holding, directly or indirectly, shares or interests in the target company. Additionally, the target company must ensure that at least 80 percent of the SPAC's funds are held in an escrow account. Furthermore, SPAC shareholders must own at least 30 percent of the target company's shares upon the completion of the transaction. Second, SPACs must be structured as joint stock companies and offer redeemable shares at the discretion of shareholders. To ensure sufficient market liquidity, the minimum post-offering capital requirement is set at SR100 million ($26.6 million). Third, SPACs would be required to complete an acquisition or merger with the target company within 24 months of their listing on Nomu. This deadline may be extended by up to 12 months with approval from the extraordinary general assembly. The draft framework also outlines specific requirements for sponsors, who must be licensed capital market institutions authorized to manage investments and operate funds. A sponsor's ownership stake must remain between 5 percent and 20 percent of the SPAC's capital throughout its lifecycle, with restrictions on the disposal of their shares during designated periods. Importantly, the sponsor and its affiliates would not be permitted to vote on the extension resolution, and the CMA must be notified of any such vote. Additionally, qualified investors would have the option to redeem their shares for a cash amount from the escrow account under certain conditions, including if they vote against a proposed acquisition or merger that is ultimately completed. If approved, SPACs would be listed on Nomu under the same rules that apply to other publicly listed companies. At least 90 percent of the capital raised in the offering must be held in a local bank escrow account, with access restricted to specific conditions defined in the proposed regulations. The CMA has invited the public to participate in the consultation by submitting feedback through its official platform. In 2024, Nomu recorded 28 initial public offerings and three direct listings, raising a total of approximately SR1.1 billion.
Argaam
27-02-2025
- Business
- Argaam
Gulf Union Alahlia issues shareholders' circular, timeline for Gulf General merger
Gulf Union Alahlia Cooperative Insurance Co. published the shareholders' circular, offer document, and the transaction timeline for its planned merger with Gulf General Cooperative Insurance Co. (GGCI), according to a statement to Tadawul today, Feb. 27. The following documents were published: 1) Shareholders circular issued by Gulf Union Alahlia to its shareholders: The shareholders' circular was prepared in accordance with the requirements of Article (60) of the Capital Markets Authority's (CMA) Rules on the Offer of Securities and Continuing Obligations, related to Gulf Union Alahlia's capital top-up for the purpose of merging GGCI into Gulf Union Alahlia, which will result in all rights, liabilities, assets and contracts of GGCI being subsumed into Gulf Union Alahlia. Gulf Union Alahlia's board noted that each shareholder must carefully read and consider all information contained in the shareholders' circular prior to making their decision on how to vote on the proposed merger. If in doubt prior to Gulf Union Alahlia's extraordinary general meeting (EGM), shareholders must consult an independent CMA-licensed financial advisor. However, they must rely on their own examination of the merger based on their individual objectives, financial situation and needs. 2) Offer Document: The offer document is issued by Gulf Union Alahlia and addressed to GGCI's shareholders. It includes the details related to the offer pursuant to Article (38) of the Merger & Acquisition Regulations for the purpose of the merger. Gulf Union Alahlia noted that GGCI's shareholders should carefully read and consider all information contained in the offer document, in addition to the board circular to be issued by GGCI's board of directors, prior to making a voting decision. 3) Merger Timetable: The merger timetable sets out the proposed dates for the main events of the planned merger's implementation, pursuant to Article 17(c) of the Merger and Acquisition Regulations. In a separate statement to Tadawul, GGCI announced publishing the board circular, which includes the board's opinion on the offer submitted to GGCI shareholders regarding the proposed merger deal with Gulf Union Alahlia. It also includes independent advice provided to GGCI board by Alinma Investment, which was appointed as GGCI's financial advisor on this transaction, in accordance with the provisions of Article (18) of the Merger & Acquisition Regulations. Several documents related to the potential merger deal will be made available for inspection by GGCI shareholders, starting today. The documents are available during normal working hours from 9:00 am until 5:00 pm during any business day, from the date of publication of this circular until the end of the offer period (as defined in the board circular). GGCI board also stressed the importance of shareholders reading the offer document and the circular of the board of directors in detail before voting on any of the decisions related to the merger deal. If in doubt before the deciding EGM, shareholders must consult an independent CMA-licensed financial advisor. However, they must rely on their own examination of the merger based on their individual objectives, financial situation and needs. Both companies noted that the proposed merger remains subject to multiple prerequisites, including obtaining the approval of Gulf Union Alahlia and GGCI's shareholders, amongst others stated in the entry into the agreement announcement. They will make further announcements when material developments occur in this regard, including results of the deciding EGMs.
Argaam
20-02-2025
- Business
- Argaam
Dallah, AYYAN issue shareholders circulars for Al-Salam-Al Ahsa acquisition deal
Dallah Healthcare Co. issued today, Feb. 20, the shareholders circular related to its capital increase for the purpose of acquiring AYYAN Investment Co. 's ownership in Al-Ahsa Medical Services Co. and Al-Salam Medical Services Co., according to a statement to Tadawul. Dallah Healthcare said the issuance of the shareholders circular came in implementation of Article 60 of Tadawul's Rules on the Offer of Securities and Continuing Obligations. In a separate statement, AYYAN announced issuing the shareholders' circular related to selling its holdings in the two aforementioned companies to Dallah Healthcare. For More Mergers and Acquisitions The documents covers all material details, terms and conditions, and all matters related to the transaction, it added. Shareholders must carefully read and consider all information contained in the shareholders circulars prior to voting. If still in doubt before the deciding extraordinary general meetings (EGMs), an independent financial advisor licensed by the Capital Market Authority (CMA) should be consulted. However, shareholders must rely on their own due diligence to ensure the transaction's feasibility and verify the information provided in the shareholders circulars, based on their investment objectives and financial situation, said the two companies. Any material developments related to the transaction will be duly announced, they added. In August 2024, Dallah Healthcare and AYYAN signed a binding acquisition and subscription agreement, under which the former would purchase the latter's 97.4% and 100% ownership in Al-Ahsa and Al-Salam companies, respectively, data compiled by Argaam showed. On Feb. 6, Dallah Healthcare announced the two-month extension of the binding acquisition and subscription agreement with AYYAN. Both companies will hold their EGMs on March 12 to vote on the planned acquisition deal. AYYAN's shareholders will vote on selling their entire stakes in Al-Ahsa and Al-Salam, while Dallah Healthcare's shareholders will vote on the proposed capital increase from SAR 976.81 million to SAR 1.02 billion through the issuance of 3.89 million ordinary shares in the run-up to the takeover transaction.
