The merger will create an EPC powerhouse with a footprint in markets within the Middle East and North Africa, MENA, South Asia.
National Marine Dredging Company’s (NMDC) Board of Directors have voted to recommend the offer to merge the company with National Petroleum Construction Company (NPCC), an offer for which was submitted by the General Holding Corporation PJSC (Senaat), a part of ADQ in August 2020. The merger will create an engineering, procurement, and construction (EPC) powerhouse 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 companies in the MENA region. According to the UAE’s state-held news agency, Wam, the board has voted to recommend the offer to shareholders following a valuation assessment of NPCC and NMDC by KPMG.
Following consideration by the directors of NMDC, the terms of the transaction, including the transaction consideration, were approved by the NMDC board in its meeting held on 11 November 2020.
In approving the terms of the transaction, the NMDC board has also reviewed the vendor legal due diligence report on NPCC by Allen & Overy LLP and a valuation report and financial due diligence report on NPCC by KPMG.
According to the NMDC board, the transaction will be beneficial for shareholders, as well as NMDC’s wider stakeholders and it has the full support of the NMDC Board. Following the merger, NMDC would remain listed on the Abu Dhabi Securities Exchange (ADX), and the combined group will be one of the largest companies on the ADX based on market capitalisation, which is expected to have a positive impact on overall demand and liquidity for the group’s shares. The key terms of the offer being proposed by the NPCC shareholders are that it will transfer NPCC to NMDC in consideration for the issuance by NMDC to the NPCC shareholders of a convertible instrument.
The instrument is convertible into 575,000,000 ordinary shares of par value $0.27 (AED1) each in the capital of NMDC, representing 69.70% of the issued share capital of NMDC following the conversion. The convertible instrument will be converted into NMDC shares immediately following the completion. The price at which it will convert into shares in NMDC is $1.2 (AED4.40) per share.
The transaction requires the approval of the NMDC shareholders for the issuance of the convertible instrument and the increase in share capital in NMDC on the conversion of the convertible instrument. This will be approved at a general body meeting which is expected to take place before the end of 2020.
The resolutions require the approval of shareholders who hold at least 75% of the shares represented at the general body meeting. Subject to the conditions of the transaction having been satisfied, it is expected that completion of the transaction, the issuance of the convertible instrument and the listing of the new NMDC shares will occur before the end of Q1 2021. At this time, there is no certainty that any transaction will occur.
Credit to www.constructionweekonline.com