Maaden signs SPSA to take over Maaden Bauxite, Maaden Aluminium

Saudi Arabian Mining Co. (Maaden) signed today, Sept. 15, a share purchase and subscription agreement (SPSA) with Alcoa Corporation (guarantor), AWA Saudi Limited (first seller) and Alcoa Saudi Smelting Inversiones S.L. (second seller), according to a Tadawul filing.

Under the deal, Maaden will acquire the entire 25.1% stake (128.01 million ordinary shares) held by AWA in Maaden Bauxite & Alumina Co. (MBAC). It will also buy out Alcoa Saudi’s 25.1% stake (165 million ordinary shares) in Maaden Aluminium Co.

Pursuant to the SPSA, the Guarantor has agreed to guarantee the financial and performance obligations and liabilities of the Sellers when they become due for performance in accordance with the terms of the SPSA.

Based on a valuation of SAR 4,13 billion, the acquisition consideration will consist of a cash payment by Maaden to Seller 1 of SAR 562.5 million (the "Cash Consideration"), with the remaining acquisition consideration of (SAR 3.562 billion) being paid through the issuance of new shares in Maaden to the Sellers (or any affiliate(s) of the Sellers designated by the Sellers to Ma’aden), calculated on a formula based on the volume-weighted average price (VWAP) of the shares of Ma’aden, and representing about 2.21% of the share capital of Maaden after completion of the acquisition.

MBAC is a limited liability company incorporated under the laws of the Kingdom of Saudi Arabia, which operates in mining bauxite and refining it to produce alumina. MBAC's authorized share capital is SAR 5.1 billion, divided into 510 million ordinary shares, at a par value of SAR 10 per share, of which Maaden currently owns 381.99 million ordinary shares, or 74.9% of the entire issued share capital of MBAC.

MAC is a limited liability company incorporated under the laws of the kingdom of Saudi Arabia, which operates in smelting, and casting aluminum and its alloys, and non-ferrous metals casting. MAC's current share capital is SAR 6.57 billion, divided into 657.38 million ordinary shares, at a par value of SAR 10 per share, of which Maaden currently owns 492.37 million ordinary shares, representing 74.9% of the entire issued share capital of MAC.

Maaden has previously entered into a share purchase and subscription agreement with Mosaic Co. (the "Mosaic Guarantor") and Mosaic Phosphates B.V. (the "Mosaic Seller") on April 29, 2023, pursuant to which Maaden has agreed to purchase 210.94 million shares of Maaden Wa’ad Al Shamal Phosphate Co. (MWSPC), or 25% of the share capital of MWSPC in exchange for Maaden issuing 111.01 million new shares in the capital of Maaden (the Mosaic capital increase") to the Mosaic Seller or its designated affiliate (the "Mosaic Acquisition").

The Mosaic Capital Increase will occur prior to the completion of the Acquisition and will result in the share capital of Ma'aden increasing from SAR 36.92 billion to SAR 38.03 million by issuing 111.02 million new shares with a par value of SAR 10 per share to the Mosaic Seller (or any affiliate of the Mosaic Seller designated by the Mosaic Seller to Maaden), thus increasing the number of Maaden's shares from 3.69 billion ordinary shares to 3.80 billion ordinary shares.

The Acquisition will be completed subsequent to the Mosaic Capital Increase having been completed, subject to the satisfaction of all regulatory and other conditions required to complete the Mosaic Acquisition.

At completion of the Acquisition, the share capital of Maaden will be increased from SAR 38.03 billion to SAR 38.89 billion by issuing 85.98 billion new ordinary shares with a par value of SAR 10 per share (the "New Shares") in favor of the Sellers (or any affiliate(s) of the Sellers designated by the Sellers to Ma’aden), thus increasing the number of its shares and 3.80 billion ordinary shares to 3.89 billion ordinary shares, representing an increase of about 2.26% in Maaden’s share capital prior to the issuance of the New Shares (the "Capital Increase").

At completion of the Acquisition, Ma’aden’s percentage ownership of the share capital of both MAC and MBAC will increase from seventy-four point nine per cent. (74.9%) to one hundred per cent. (100%) while the percentage of direct and indirect ownership by the Sellers in Maaden will be equal to approximately two point twenty-one per cent. (2.21%).

Upon the completion of the Acquisition, Maaden’s percentage ownership in the share capital of each of MAC and MBAC will increase from 74.9% to 100%, and the percentage of direct and indirect ownership by the Sellers (and any or any affiliate(s) of the Sellers designated by the Sellers to Maaden) in Maaden will be equal to approximately 2.21%. The ownership of the Maaden shareholders as of the date of the completion of the Mosaic Acquisition will decrease from 100% to 97.79 %. This will not result in any change in the number of shares owned by Maaden's shareholders at the time of the completion of the Acquisition.

Completion of the Acquisition will be subject to the satisfaction of certain regulatory and corporate conditions, including but not limited to the approval of the Capital Market Authority, the Saudi Exchange, and including other regulatory approvals (as applicable), and the extraordinary general assembly of Maaden.

The SPSA includes customary fundamental warranties given by each Party and tax warranties given by the Sellers.

Maaden shall be the sole shareholder of MAC and MBAC after the completion of the Acquisition.

Pursuant to the SPSA, the Sellers are subjected to a lock-up period of up to five years commencing from the date of the completion of the acquisition (the "Completion Date"). Following the third anniversary of the Completion Date, the Sellers may, directly or indirectly, transfer or dispose a fixed number of the New Shares without the prior written consent of Ma’aden, which shall increase to an amount up to all of the New Shares following the fifth anniversary of the Completion Date, in accordance with the terms of the SPSA.

The Sellers retain the right to enter into certain hedging and derivative instruments pursuant to the SPSA notwithstanding the lock-up of the new shares.

All relevant details with respect to the lock-up and any related provisions, as well as the mechanism for the Seller's exit from ownership of Maaden's shares will be disclosed in Maaden’s shareholders’ circular upon its publication.

Maaden will announce any material developments in respect of the Acquisition (as the case may arise).

Maaden also said it has appointed SNB Capital as the financial advisor and AS&H Clifford Chance law firm as the legal advisor in relation to the Acquisition, noting that there are no related parties.

As for the expiry date of the agreement, either Maaden or the Sellers may terminate the SPSA in the event that completion has not occurred within 12 months after the date of signing the SPSA, or such other date as the Parties may agree in writing, from time to time.

Regarding the agreement termination terms, the SPSA may be terminated prior to completion of the Acquisition by Maaden or the Sellers at the occurrence of certain events, including (without limitation) if there is a breach by any party to their representations and warranties under the SPSA (which have not been cured, if capable of remedy, within the time period specified in the SPSA) or if the completion of the acquisition has not occurred by the date that the parties agreed to, or may agree to, in writing from time to time.

The completion of the acquisition remains subject to a number of pre-conditions, including, without limitation:

1- Obtaining the approval of the Capital Market Authority in respect of the shareholders' circular, the capital increase and the issuance of the new shares.

2- Obtaining the approval of the Saudi Exchange (Tadawul) to list the new shares resulting from the capital increase.

3- Receipt of all anti-trust approvals or clearances required for the acquisition.

4- Obtaining the approval of the extraordinary general assembly of Maaden, in accordance with Maaden’s bylaws and the provisions of the Companies Law and the Rules on the Offer of Securities and Continuing Obligations.

5- Obtaining the approval of the Ministry of Commerce of Maaden's amended and restated bylaws (including the publication of such bylaws) and its updated commercial registration certificate.

6- No authority of a competent jurisdiction with respect to certain specified activities, including antitrust matters, having enacted any law, order, injunction, judgment or decree to prohibit the Acquisition or make it illegal.