Dubai-listed Depa PLC said on Friday it has entered into an agreement with Saudi Arabia's Public Investment Fund (PIF), whereby the sovereign wealth fund will make a cash investment of 150 million dirhams ($40.84 million) in return for a majority stake.

PIF will be allotted 750,000,000 new Class A shares in Depa, interior design contractor said in a statement on Nasdaq Dubai.

The deal allows Depa to enter Saudi Arabia, identified as a key growth market, with the support of a strategic partner. The cash infusion will also allow it to better execute its expansion plans, it added.

Depa said the transaction has received the requisite waivers and consents from the DFSA on 8 February 2022, subject to other approvals from its extraordinary general meeting.

Chairman Abdullah Al Mazrui said the transaction provides an exciting opportunity for Depa.

"The share issuance provides a much-needed boost to the group’s liquidity position which will afford Depa with a platform for its expansion plans in the region, particularly in Saudi Arabia. In addition, Depa’s long term strategic prospects are also enhanced by the proposed partnership with PIF in its key market going forward."

Other highlights of the deal:

  • The subscription shares allotment gives PIF a majority voting rights and rights to distributions in Depa, representing in each case approximately 55 percent of the total of such rights.
  • As part of the transaction, Depa’s board will be expanded to include six more members all of whom will be nominated by PIF.
  • The subscription shares will not initially be listed on Nasdaq Dubai, but an application to admit them will be made later.
  • PIF will be issued a warrant instrument as part of the transaction. Certain payments relating to tax will allow the wealth fund to exercise the warrant and receive up to 272,829,158 additional Class A shares.
  • If exercised in full, it will boost PIF’s shareholding and voting rights to approximately 62.5 percent of the enlarged share capital.
  • The warrant instrument may be exercised up to 18 months following the completion of the transaction.

(Reporting by Brinda Darasha; editing by Seban Scaria)

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