Jabal Omar Development Company announces the submission of a non-binding offer to the manager of the Alinma Makkah Real Estate Fund relating to the full settlement of the rights and obligations in respect of the Fund’s assets

Further to the announcement made by Jabal Omar Development Company (the “Company”) via the website of the Saudi Exchange on 22 March 2017G, in relation to the sale of three hotels and a commercial area to Alinma Makkah Real Estate Fund (the “Fund”) and subsequently re-leasing such assets, which were to be operated by the Company for a period of ten (10) years at an annual rent of SAR 540,000,000, and due to the negative impact of the COVID-19 pandemic, which resulted in a decrease in the revenues of the Company generated from such leased hotels and commercial areas and, consequently, the Company’s inability to continue paying the annual rent due to the Fund, and based on the relevant discussions and negotiations that have taken place between the Company and the manager of the Fund (the “Fund Manager”) in this regard, and the Company’s desire to reach a full and final settlement in relation to the Company’s obligations vis-à-vis the Fund, its assets and all related rights and obligations in order to achieve the best outcome for all parties involved, the Company announces that it has submitted a non-binding offer to the Fund Manager (on behalf of the Fund) on 5 Safar 1443H (corresponding to 12 September 2021G) (the “Offer”) for the settlement of all payment obligations and other liabilities owed by the Company to the Fund by offering 193,068,966 newly issued shares in the Company (the “New Shares”) to the unitholders of the Fund (the “Unitholders”) in exchange for: (i) all payment obligations and other liabilities owed by the Company to the Fund and/or the Fund related entities (mainly comprising the rental payments owed together with other obligations) pursuant to the relevant Fund documents and agreements being deemed to be completely and finally settled and paid; (ii) the Fund and/or the Fund related entities surrendering to the Company all of their rights over the assets, pursuant to the relevant Fund documents and agreements, including rights of ownership and any other rights; and (iii) all collateral and security granted by the Company to the Fund and/or the Fund related entities being released and terminated, including the release and termination of the collateral and security of the mortgaged assets (the “Potential Transaction”).
The Company notes that the Offer submitted by the Company is non-binding and subject to certain matters, including the acceptance of the Offer by the Fund and the agreement with the Fund Manager (on behalf of the Fund) on the terms and conditions of the Potential Transaction and the execution of a binding agreement in respect thereof. In the event that a binding agreement is executed, the implementation of the Potential Transaction will then be subject to several conditions and approvals, including the relevant regulatory approvals, which include the approval of the Capital Market Authority, the approval of the Company’s extraordinary general assembly in respect of the Potential Transaction, and other conditions that will be specified in the binding agreement. Please refer to the attachment for further details in relation to the Offer, noting that such details may be subject to change in accordance with what may be agreed in the binding agreement.

SNB Capital was appointed as the Company’s financial advisor, and Abuhimed Alsheikh Alhagbani Law Firm (AS&H) was appointed as the Company’s legal advisor in relation to the Potential Transaction.

It should be noted that the Potential Transaction involves a related party transaction, and a number of the Company’s board members have an in interest in the Potential Transaction, which will be assessed and determined by the Company for the purposes of ensuring compliance with the relevant laws and regulations. Further details of the related parties and the interested board members will be announced at a later stage.

The Company will announce any further material developments in relation to the Potential Transaction in a timely manner as required by the relevant laws and regulations.

Attached Documents