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November 20, 2020

Abu Dhabi moves forward with oil industry merger

By MEED   

Abu Dhabi oil & gas contractor NPCC is proposed merger with dredging company NMDC in August

National Marine Dredging Company (NMDC) has announced its board of directors has voted to recommend to shareholders the offer from General Holding Corporation (Senaat), a part of Abu Dhabi’s industrial holding entity ADQ, and other minority shareholders of oil and gas contractor National Petroleum Construction Company (NPCC) to merge NPCC and NMDC.

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“The [NMDC] board has voted to recommend the offer to shareholders following a valuation assessment of NPCC and NMDC by KPMG,” NMDC said in a statement on 12 November.

Senaat and other minority shareholders of NPCC submitted an offer in August to the NMDC board for the merger of the two energy sector contracting companies.

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 on 11 November.

In approving the terms of the transaction, the NMDC board has, among other things, reviewed the vendor legal due diligence report on NPCC prepared by Allen & Overy and a valuation report and financial due diligence report on NPCC prepared by KPMG.

“The NMDC Board believes the transaction is beneficial for shareholders, as well as NMDC’s wider stakeholders and it has the full support of the NMDC Board,” NMDC said in its statement.

“The combination of NMDC and NPCC will create one of the leading integrated oil and gas and marine services EPC players, with an established footprint across Mena and South Asia,” it added.

NMDC would remain listed on the Abu Dhabi Securities Exchange (ADX) following completion and the combined group will be one of the largest companies on the ADX based on market capitalisation.

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 million ordinary shares of par value AED 1 each in the capital of NMDC, representing 69.70 per cent 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 AED4.40 a share.

The transaction requires the approval of the NMDC shareholders at a general body meeting, which is expected to take place before the end of 2020, to the issuance of the convertible instrument and the increase in share capital in NMDC on the conversion of the convertible instrument.

An invitation to the general body meeting will shortly be sent to shareholders by the NMDC board.

The resolutions require the approval of shareholders who hold at least 75 per cent 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 the first quarter of 2021.

At this time, there is no certainty that any transaction will occur, NMDC said.

This article is published by MEED, the world’s leading source of business intelligence about the Middle East. MEED provides exclusive news, data and analysis on the Middle East every day. For access to MEED’s Middle East business intelligence, subscribe here.

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2022: So far In Venture Capital

Global investment in 2022 has been majorly dominated by North America, Europe, and Asia Pacific, whereas the Middle East, and South and Central America have recorded low investments comparatively. In light of this, Europe and North America have been identified as the major destinations for Private Equity and Venture Capital (PE/VC) investments.   GlobalData’s whitepaper analyzes which sectors PE/VC firms have been investing in, looking at Technology, Media, and Telecom, with these sectors recording $356 billion and a deal volume of over 10,000 deals in 2022. Healthcare, Financial Services, Business & Consumer Services, and Construction sectors have also seen high investment activity by PE/VC firms, recording a deal value of over $70 billion each.   But what can this mean for you?   Understand how the Deals Database on GlobalData Explorer can be leveraged to:  
  • Track the Aggregate Investment Volumes in PE/VC-Stage firms across geographies and sectors, in addition to viewing the specific deals that drove these volumes
  • Identify the top investors already active in any sector-Geography combinations
  • Assess the Performance of Financial and Legal Advisors, supporting the Dealmaking in any segment of choice (Customizable League tables)
  • Understand what is driving the PE/VC fundraising (Deal Rationale)
  Consult our full report here and optimize your business strategy.
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