Tuesday 24 November 2020 - 7:14:55 pm

NMDC Board recommends offer to combine National Petroleum Construction Company with National Marine Dredging Company


ABU DHABI, 12th November, 2020 (WAM) -- National Marine Dredging Company, NMDC, announced today that its Board of Directors has voted to recommend to NMDC shareholders the offer from General Holding Corporation PJSC (Senaat), a part of ADQ, and other minority shareholders of National Petroleum Construction Company PJSC, NPCC, (together, the "NPCC Shareholders"), to merge NPCC and NMDC.

NPCC is a world-class Engineering, Procurement and Construction company that provides total EPC solutions to both the Offshore and Onshore Oil & Gas sector.

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 11th November, 2020. In approving the terms of the transaction, the NMDC Board has, amongst other things, reviewed the vendor legal due diligence report on NPCC prepared by Allen & Overy LLP 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. The combination of the NMDC and NPCC (the "Combined Group") will create one of the leading integrated oil and gas and marine services EPC players, with an established footprint across MENA and South Asia. 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, which is expected to have a positive impact on overall demand and liquidity for the Combined 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 convertible instrument is convertible into 575,000,000 ordinary shares of par value AED 1 each in the capital of NMDC, representing 69.70 percent 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 per 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 percent 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.

WAM/Esraa Ismail/Rasha Abubaker