Nasdaq Dubai-listed interior fit-out giant Depa PLC (Depa) has entered into a definitive subscription agreement with the sovereign wealth fund of Saudi Arabia, the Public Investment Fund (PIF).
As per the agreement, PIF will make a cash investment of $40.8mn (AED150mn) in Depa in return for the allotment of 750,000,000 new Class A shares [subscription shares] in Depa, the interior fit-out company posted in a stock market missive.
As stated in the missive, the subscription shares will rank pari passu in all respects, with the existing issued ordinary shares of Depa.
Allotment and issuance of subscription shares
The allotment and issuance of the subscription shares to PIF will confer on PIF a majority of voting rights and rights to distributions in the interior company, representing in each case approximately 55% of the total of such rights.
The transaction will include a restructuring of Depa’s board which will increase the number of directors from five to eleven, with the six newly appointed directors to be nominated by PIF.
PIF’s shareholding rights and former shareholders
Furthermore, following the transaction, a warrant instrument will be issued to PIF, which may be exercised up to 18 months following the completion of the transaction. If the warrant instrument is exercised in full, PIF’s shareholding and voting rights may increase up to approximately 62.5% of the enlarged share capital, the stock market missive stated.
In October 2020, the Nasdaq Dubai-listed interior fit-out giant revealed a debt exposure of $22.3mn (AED82mn), following the liquidation of Dubai-based Arabtec Holding, which was its second largest shareholder at the time (having owned 24.18% stake in the company).
Strategic growth in Saudi Arabia
The transaction between PIF and Depa will provide the latter with the support of a strategic partner in Saudi Arabia, which has been identified as a key growth market for Depa Interiors, Carrara, and Deco businesses.
The increased liquidity resulting from the transaction will allow the interior fit-out firm to better execute its expansion plans, particularly in Saudi Arabia.
The proceeds will also be used to recapitalise the business and provide additional working capital with which the interior fit-out giant can deliver both its existing projects and future projects.
In this regard, Depa recently announced two project awards totalling more than $41mn (approximately AED150mn).
Depa Interiors, the group’s Middle East key business unit which specialises in the provision of interior solutions to the hospitality, residential, commercial, and transport and civil infrastructure sectors, secured a significant hospitality package in Jeddah, Kingdom of Saudi Arabia for a hospitality brand worth more than $19.7mn (SAR74mn).
Additionally, Depa Interiors secured a fit-out package for a hospitality project within a high-rise mixed-use development in the centre of Dubai worth more than $21mn (AED78mn).