Logo of Middle East Paper Co. (MEPCO)
Middle East Paper Co. (MEPCO) issued today, Dec. 7, the prospectus for offering new shares worth about SAR 630 million, while suspending rights issue.
The company plans to offer about 20 million shares at SAR 31.5 each, to increase capital from SAR 666.67 million to SAR 866.67 million.
The capital increase is aimed to reinforce the strategic growth initiatives planned by the company by accelerating its placement as the national leading in Saudi Arabia for the integrated paper and packaging industry and the positioning of the brand name globally.
This is in addition to the development of the company as a key enabler in the waste management and recycling industry, directly contributing to the Saudi Vision 2030, while garnering greater access to resources for external growth through value accretive merger and acquisition opportunities beyond its current domain or capabilities.
MEPCO obtained, on Dec. 4, the Capital Market Authority’s (CMA) approval to increase its capital through issuing about 20 million new shares and suspending preferential rights worth SAR 630 million.
In May, the company inked a memorandum of understanding (MoU) with the Public Investment Fund (PIF), under which the latter will subscribe to the new shares at SAR 31.50 each, representing a significant minority stake.
Capital Hike Details
Current Capital
SAR 666.67 mln
Current Number of Shares
66.67 mln
Capital increase (%)
30%
New Capital
SAR 866.67 mln
Number of Shares after Increase
86.67 mln
Share Offering Key Details
Offered Shares
20 mln
Offer Price
SAR 31.5
Issue Size
SAR 630 mln
Offer Proceeds
Paper production plant (PM5)
Land allocation
50.00
Main equipment contracts
124.81
PM5 Subtotal
174.81
Tissue production plant (TM6)
Main equipment contracts
90.00
Building construction
40.00
Equipment installation
23.98
TM6 Subtotal
153.98
Acquisition of a set of assets and shares of existing establishments operating in the field of manufacturing and supply of corrugated boxes to achieve forward integration acquisition
291.12
Offering costs
10.09
Total
630.00
Additional Information
Financial Advisor & Underwriter
SNB Capital
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