Sustained Infrastructure Holding Co. — Capital/Financing Update 2021

Jul 15, 2021

Saudi Industrial Services Company (“SISCO”) completes sale of 21.2% minority equity stake in Red Sea Gateway Terminal Limited (“RSGT”), for a gross consideration of SAR 556.5 million, to the Public Investment Fund (“PIF”) and COSCO SHIPPING Ports Limited (“CSPL”)

2190 · 15/07/2021 08:59:59 · Announcement #64204 · View on Saudi Exchange

Saudi Industrial Services Company (“SISCO”) completes sale of 21.2% minority equity stake in Red Sea Gateway Terminal Limited (“RSGT”), for a gross consideration of SAR 556.5 million, to the Public Investment Fund (“PIF”) and COSCO SHIPPING Ports Limited (“CSPL”)

Element List	Explanation
Introduction	Referring to the Company's announcement on the Saudi Exchange website dated 27/01/2021G corresponding to 14/06/1442, Saudi Industrial Services Company (“SISCO”) announces that it has concluded the sale of its 21.2% direct equity stake together with the sale of 18.8% equity stake of other minority shareholders (the “Transaction”) in its subsidiary Red Sea Gateway Terminal Limited (“RSGT”) to the Public Investment Fund (“PIF”) and COSCO SHIPPING Ports Limited (“CSPL”) (through its wholly-owned subsidiary Sound Joyce Enterprises Limited) on a pro-rata basis. The date of the completion of the transaction is 14 July 2021 (corresponding to 4-Dhu al-Hijjah-1442).
Transaction Details	The Transaction involves the sale of SISCO’s 21.2% direct equity stake in RSGT, SISCO’s subsidiary Saudi Trade and Export Development Company Limited’s (“LogiPoint’) (of which SISCO owns 76%) sale of a 4% direct equity stake, and the 14.8% equity stake of other minority shareholders of RSGT to both PIF and CSPL on a pro-rata basis.

SISCO’s 21.2% direct equity stake sale has been made for a total consideration of SAR 556.5 million. Transaction Value The Transaction implies an Enterprise Value for RSGT of SAR 3.3 billion.

SISCO will receive total gross proceeds of SAR 556.5 million (before all transaction costs) for the Transaction.

In addition, LogiPoint will receive total gross proceeds of SAR 105 million (before all transaction costs) for the divestment of its 4% equity stake in RSGT. Transaction Terms All the necessary terms and conditions of the Transaction have been met, including obtaining the approval of the Saudi Ports Authority (“Mawani”) and all other regulatory and third-party approvals. Parties of the Transaction Saudi Industrial Services Company (seller)

Saudi Trade and Export Development Company Limited (a subsidiary of SISCO) (seller)

Other minority shareholders of RSGT (sellers)

Public Investment Fund (buyer)

COSCO SHIPPING Ports Limited (through its wholly-owned subsidiary Sound Joyce Enterprises Limited) (buyer)

Red Sea Gateway Terminal Limited (target)

JP Morgan (Financial Advisor)

Legal Advisors Abdulaziz Alajlan & Partners in association with Baker & McKenzie Limited (Legal Advisor) Transaction Execution Date 2021-07-14 Corresponding to 1442-12-04 Description of the Business of the Asset forming the Subject Matter of the Transaction RSGT is engaged in the development, construction, operation, and maintenance of container terminals, handling and unloading services and shipping, navigation and marine support services necessary to provide ships with water, energy, sewage treatment and the excavation and backfill, and investment in these activities. Headquartered in Jeddah, RSGT is the largest container port operator in Saudi Arabia. Asset Book Value Not applicable Financial Statements for the Last Three Years of the Asset forming the Subject Matter of the Transaction Not applicable Transaction reasons The Transaction will benefit and enhance RSGT’s value proposition, a key asset within SISCO’s portfolio of subsidiaries, by bringing on board world-class strategic investors (PIF and CSPL) who will help drive the future growth of the business. The Transaction is in line with SISCO’s long-standing strategy of strengthening and optimizing its portfolio with the ultimate objective of providing long-term value to shareholders. The Transaction also demonstrates SISCO’s track record for developing its assets, and its ability to create value for shareholders. Expected Impact of the Transaction on the Company and Its Operations The impact from the Transaction, which will be calculated subject to the finalisation of Q2 2021 financial results and the final payment of costs associated with the Transaction, will be reflected in SISCO’s Q3 2021 financial statements. In addition, the impact of LogiPoint’s divestment of 4% direct equity stake in RSGT will also be reflected in SISCO’s Q3 2021 financial statements subject to the same conditions.

PIF and CSPL now each own a 20% equity stake in RSGT with the remaining 60% shares being held by SISCO’s subsidiary Red Sea Ports Development Company Limited (RSPD) (SISCO owns 53% of RSPD).

SISCO’s effective shareholding has reduced from 60.6% to 36.36%. From an accounting perspective, SISCO will continue to consolidate RSGT through its subsidiary RSPD.

The impact of the reduction in effective shareholding will also be reflected in Q3 2021 financial statements.

A further announcement quantifying the impact of the above adjustments will be made following the release of Q2 2021 financial statements. A full disclosure of the impact on Q3 2021 financial statements will also be included in the notes to the Q2 2021 financial statements. Details of Using The Proceeds of the Asset Sale The application of the net proceeds, which is currently under review, is expected to be announced by the end of Q3 2021. Related Parties Not applicable Attached Documents  

The Capital Market Authority and Saudi Exchange take no responsibility for the contents of this disclosure, make no representations as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this disclosure, and the issuer accepts full responsibility for the accuracy of the information contained in it and confirms, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts or information the omission of which would make the disclosure misleading, incomplete or inaccurate.