Jabal Omar development company announces the board’s recommendation to increase capital through debt conversion

Introduction
Further to the announcement made by Jabal Omar Development Company (the “Company”) published on the Saudi Exchange website on 02/09/1443H (corresponding to 03/04/2022G) in relation to the execution of a legally binding transaction agreement with the manager of Alinma Makkah Real Estate Fund (the “Fund”) to implement the Transaction on 01/09/1443H (corresponding to 02/04/2022G), pursuant to which the parties have agreed to fully settle all rights and obligations related to the Fund and its related entities, the Company announces that, on 19/09/1443H (corresponding to 20/04/2022G), its Board of Directors has recommended the increase of the Company’s capital by way of debt conversion whereby the Company will convert its debts towards the Fund in the amount of five billion and three hundred and one million and two hundred and one thousand and eighty Saudi Riyals (SAR 5,301,201,080) as recorded in the Company’s unaudited interim condensed consolidated financial statements for the three-month and nine-month periods ended on 30 September 2021G (the “Debt”) (including the settlement of all rights and obligations owed by the Company to the Fund and its related entities) into new ordinary shares in the Company to the Fund unitholders (excluding the Company in its capacity as a unitholder in the Fund), through a capital increase of the share capital of the Company from nine billion two hundred ninety-four million Saudi Riyals (SAR 9,294,000,000) to eleven billion five hundred forty-five million three hundred forty-one thousand and six hundred twenty Saudi Riyals (SAR 11,545,341,620) by issuing two hundred twenty-five million and one hundred thirty-four thousand and one hundred sixty-two (225,134,162) new shares.

Date of Board Meeting
2022-04-20 Corresponding to 1443-09-19

The total amount of debts that the company intends to convert
Five billion and three hundred and one million and two hundred and one thousand and eighty Saudi Riyals (SAR 5,301,201,080) as recorded in the Company’s unaudited interim condensed consolidated financial statements for the three-month and nine-month periods ended on 30 September 2021G.

Reasons for the Capital Increase
The reason for the Debt conversion is the settlement of all rights and obligations of the Company and the Fund and the Fund related entities, the Fund and the Fund related entities will surrender 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 all collateral and security granted by the Company to the Fund and the Fund related entities being released and terminated, which will improve the Company’s liquidity and credit position and enhance its ability to achieve its growth objectives. The Capital Increase will not result in any financial liability on or require any cash contribution by the Company’s shareholders.

Approvals
It should be noted that the Company must obtain all required regulatory approvals and the approval of the Company’s extraordinary general assembly prior to increasing its capital through debt conversion.

Appointment of a Financial Advisor and the Submission of the Application File for Capital Increase through Debt Conversion to CMA
An announcement will be made by the Company upon the appointment of a financial advisor to manage the Company’s application to increase its capital by way of debt conversion. The Company will also make an announcement when such application is submitted to the Capital Market Authority for approval in a timely manner.