National Agricultural Development Co. — Capital/Financing Update 2021

Apr 21, 2021

The National Agricultural Development Company (NADEC) announces the award of the joint bid with OLAM International Limited, Al Rajhi International for Investment Company and Abdulaziz Alajlan & Sons Company for Commercial and Real Estate Investment to acquire a flour mill out of two flour mills that will be offered for privatization by the Saudi Grains Organization (SAGO).

6010 · 21/04/2021 09:03:32 · Announcement #62918 · View on Saudi Exchange

The National Agricultural Development Company (NADEC) announces the award of the joint bid with OLAM International Limited, Al Rajhi International for Investment Company and Abdulaziz Alajlan & Sons Company for Commercial and Real Estate Investment to acquire a flour mill out of two flour mills that will be offered for privatization by the Saudi Grains Organization (SAGO).

Element List

Explanation

Introduction

Further to the National Agricultural Development Company (“NADEC”) announcement on 07/09/1442H (corresponding to 19/04/2021G) in relation to the joint bid made by NADEC with OLAM International Limited, Al Rajhi International for Investment Company and Abdulaziz Alajlan & Sons Company for Commercial and Real Estate Investment (hereinafter referred to as the “Consortium Members”) on 07/09/1442H (corresponding to 19/04/2021G) to acquire a flour mill out of two flour mills that will be offered for privatization by the National Centre for Privatization (“NCP”) and the Saudi Grains Organization (“SAGO”) (the “Joint Bid”).

NADEC is pleased to announce that the Consortium Members have been awarded the Joint Bid from NCP and SAGO to acquire the Second Milling Company in Riyadh, Kingdom of Saudi Arabia. Date of the Award 2021-04-20 Corresponding to 1442-09-08 Contract Value Two billion and one hundred thirty-eight million Saudi Arabian Riyals SAR 2,138,000,000

The acquisition transaction by the Company of the Second Milling Company is intended to be financed through a combination of self-financing by the Consortium Members and borrowing from local banks in the name of the Company. Contract Details Further to NADEC’s announcement on 07/09/1442H (corresponding to 19/04/2021G) in relation to its entry into a term sheet on 07/09/1442H (corresponding to 19/04/2021G) with the Consortium Members (“Term Sheet”), NADEC would like to note that the Term Sheet has become binding on the Consortium Members following the award of the Joint Bid, and the Consortium Members shall form a limited liability company (the “Company”) (with a specified capital and specific ownership percentages of each member, whereby NADEC would own 10% of the capital of the Company) to acquire the Second Milling Company, operate and manage it therein in accordance with the Joint Bid.

The Term Sheet further contains a number of terms and conditions agreed by the Consortium Members regarding the commercial business, administrative services and operational services of the Second Milling Company, and which are proposed to include an offtake agreement to govern NADEC’s purchase of certain products from the Second Milling Company as well as a services agreement pursuant to which NADEC would provide certain management, marketing and support services to the Second Milling Company, all in accordance with what will be negotiated and agreed upon in the Final Agreements.

The Consortium Members will complete negotiations and enter into the final agreements which will govern the formation, management and operation of the Company as well as the Company’s management and operation of the Second Milling Company (the “Final Agreements”). NADEC will announce any further material developments, including details of the terms agreed upon in the Final Agreements, as required by the relevant rules and regulations.

This acquisition falls within the expansion plan of NADEC to enhance the value of its investments in the flour milling sector in the Kingdom of Saudi Arabia. Related Parties Sulaiman Al Rajhi Holding Company, as represented on the board of directors of NADEC by Mr. Bader Abdulrahman Alsayari , as a related party, due to its percentage ownership in Al Rajhi International for Investment Company. Additional Information Following the award of the Joint Bid, it is expected that the Consortium Members will complete the final negotiations regarding the Final Agreements within a period not exceeding 3 months from the date the results of the Joint Bid were released.

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