Depa PLC (“Depa”), the leading global interior solutions group, announces that it has entered into a definitive subscription agreement with the Public Investment Fund (“PIF”), whereby the PIF will make a cash investment of AED 150,000,000 in Depa in return for the allotment of 750,000,000 new Class A shares (the “Subscription Shares”) in Depa (the “Transaction”).
Key terms of the Transaction
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 allotment and issuance of the Subscription Shares to PIF will therefore 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.
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.
The Transaction will include a restructuring of Depa’s board which will increase the number of directors from five to eleven, with the six newly appointed directors to be nominated by PIF.
As part of the Transaction there will be a warrant instrument (the “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. 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 Transaction received the requisite waivers and consents from the DFSA on 8 February 2022, on the condition that certain matters to be proposed at an extraordinary general meeting of Depa in connection with the Transaction are duly approved.
Strategic rationale and use of proceeds
The Transaction will provide Depa with the support of a strategic partner in Saudi Arabia which was identified during Depa’s 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 proceeds will also be used to recapitalise the business and provide additional working capital with which Depa can more comfortably deliver both its existing projects and future projects.
Conditions and approval
The Transaction is conditional on, amongst other things, a waiver from the Nasdaq Dubai and is subject to Depa shareholders’ approval of certain resolutions requiring 75% or more of those present in person or by proxy in general assembly. A shareholder circular will be published in due course and the required meetings to approve the Transaction will be convened as soon as practicably possible.
Shareholders representing 60% (excluding treasury shares) of the existing issued share capital of Depa have provided irrevocable undertakings to vote in favour of the Transaction upon the shareholder vote taking place.
Abdullah Al Mazrui, Non-executive Chairman, commented: “This transaction provides an exciting opportunity for Depa PLC. 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 PLC.”
Tel: + 971 4 821 6666
Kevin Lewis, Group Chief Executive Officer
Steven Salo, Group Chief Financial Officer
For more information, please refer to the corporate website:
Notes to editors:
Depa is a strategic management company specialising in global interior solutions. Depa’s key business units hold leading positions in their respective markets: Vedder, Depa Interiors and the Deco Group. Employing thousands of people worldwide, the Group’s operations are centred on two regional hubs: Europe and the Middle East.
Depa’s mission, shared by each of its key business units, is to deliver sustainability, profitability and performance for its clients, shareholders and employees. The Group’s five core values are integral to everything Depa does: transparency, integrity, accountability, professionalism and exceptional service.
Depa PLC is listed on the Nasdaq Dubai (DEPA: DU) and is headquartered in Dubai, United Arab Emirates.
This document may contain certain 'forward looking statements' with respect to Depa's financial condition, results of operations and business and certain of Depa's plans and objectives with respect to these items. By their very nature, forward looking statements are inherently unpredictable, speculative and involve risk and uncertainty because they relate to events, and depend on circumstances, which may occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. All written or verbal forward looking statements, whether made in this document or made subsequently, which are attributable to Depa or any other member of the Group or persons acting on their behalf are expressly qualified on this basis. Depa does not intend to update any such forward looking statements.
PIF is one of the largest and most impactful sovereign wealth funds in the world. Since 2015, when PIF’s board of directors was reconstituted and oversight transferred to the Council of Economic and Development Affairs, PIF’s board of directors has been chaired by HRH Prince Mohammed bin Salman Al Saud, Crown Prince, Deputy Prime Minister and Chairman of the Council for Economic and Development Affairs. By the end of Q4 2021, PIF’s assets under management amounted to more than 1.8 trillion Saudi riyals. PIF plays a leading role in advancing Saudi Arabia’s economic transformation and diversification, as well as contributing to shaping the future of the global economy. Since 2017, PIF has established 47 companies and created, directly and indirectly, more than 450,000 jobs as at the end of 2021.
PIF is building a diversified portfolio by entering into attractive and long-term investment opportunities in 13 strategic sectors in Saudi Arabia and globally. PIF’s strategy, as set out in the PIF Program 2021-2025 - one of the Vision 2030 realization programs - aims to enable many promising sectors and contribute to increasing local content by creating partnerships with the private sector, in addition to injecting at least 150 billion riyals annually into the local economy. PIF works to transfer technologies and localize knowledge to build a prosperous and sustainable economy in Saudi Arabia. As the investment arm of Saudi Arabia, PIF looks to make unique investments, and is building strategic alliances and partnerships with prestigious international institutions and organizations, which contribute to achieving real long-term value for Saudi Arabia in line with the objectives of Vision 2030. PIF has also created an operational governance model that reflects its main tasks and objectives, in line with best international practices. Applying this model of governance enhances the level of transparency and effectiveness in decision-making and future progress.
More information about PIF can be found at www.pif.gov.sa
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