By Grace Ademulegun
The Saudi Arabian Mining Company (Ma’aden), has declared plans to raise its share capital from SAR 36.9 billion to SAR 38.03 billion ($10.12 billion).
The issuance of more than 111 million common shares, each worth SAR 10, will accomplish this 3.01 percent increase.
The goal of the capital adjustment is to facilitate Ma’aden’s purchase of Mosaic Phosphates’ full 25 percent ownership of the Ma’aden Wa’ad Al Shamal Phosphate Company (MWSPC).
Ma’aden’s stake in MWSPC is expected to increase from 60 percent to 85 percent as a result of this purchase. The Saudi Basic Industries Corporation (SABIC), Ma’aden, and Mosaic are partners in MWSPC, which is a joint venture.
In exchange for its 25 percent ownership in MWSPC, Mosaic is expected to receive 111,012,433 freshly issued shares of Ma’aden as part of the agreement that was finalised in April.
This will boost Ma’aden’s expansion strategy and solidify its position in the phosphate industry.
Ma’aden has announced that its shareholders will convene virtually on December 11 to approve a planned capital increase, which is part of the company’s acquisition of Mosaic Phosphates’ 25 percent stake in the Ma’aden Wa’ad Al Shamal Phosphate Company (MWSPC).
The transaction will raise Ma’aden’s ownership in MWSPC to 85 percent, while Saudi Basic Industries Corporation (SABIC) retains its 15 percent stake.
The MWSPC, established in 2014 and headquartered in Turaif, is recognized as a cost-efficient, large-scale producer of phosphate.
As part of the deal, Mosaic Netherlands Holding Co., a subsidiary of Mosaic Co., will receive 111,012,433 newly issued shares in Ma’aden. These shares, valued at SAR 10 each, will be subject to a three-year lock-up period.
Partial transfers of shares will begin in the fourth year, with full tradability allowed by the fifth. The acquisition also includes Mosaic’s marketing rights, a key component of the agreement valued at SAR 5.62 billion.
The deal is expected to enhance Ma’aden’s control over MWSPC, creating significant synergies and operational efficiencies.
Ma’aden projects an increase in earnings per share as a result of the transaction. The company also confirmed that all regulatory approvals have been secured and provided a detailed timeline for the process in a shareholder circular.
The acquisition supports Ma’aden’s strategic goals of driving growth in the Kingdom’s mining sector, aligning with Saudi Vision 2030’s focus on economic diversification and industrial development. In the first half of 2024, Ma’aden reported a net profit of SAR 2 billion, a 160% increase compared to the same period in 2023.
This growth was fueled by higher sales volumes in aluminum and gold, as well as reduced raw material costs and depreciation expenses.
Ma’aden’s overall performance highlights its commitment to becoming a leader in the global mining industry while contributing to Saudi Arabia’s industrial and economic transformation. ENDS
Abridged from Arabnews