Complex Made Simple

Latham & Watkins advises on $1.5bn rights issue by Ma’aden

The Law Office of Salman M. Al-Sudairi in association with Latham & Watkins LLP advised the Saudi Arabian Mining Company (Ma’aden) on a $1.5bn (SR5.6bn) rights issue with an offering price of SAR23 per share, representing a 26.3 percent increase in Ma’aden’s share capital which now stands at more than SR11.5bn.

The rights issue by Ma’aden represents one of the largest rights issues ever in the Middle East and one of the few under the new tradable rights framework in the Kingdom of Saudi Arabia.

Ma’aden is the largest mining company in the Middle East and among the world’s fastest growing; since its IPO seven years ago, Ma’aden has grown revenues from SR240m to SR6bn. When the second of its two mega phosphate projects is complete, Ma’aden and its partners will have invested SR49bn in phosphate operations and made Saudi Arabia one of the world’s largest producers of phosphate. The proceeds from the rights issue will be used to fund Ma’aden’s phosphate and aluminium operations, as further described in the rights offering prospectus.

This deal is one of the few issuances under the new tradable rights framework in Saudi Arabia and the first where shares were offered at a premium instead of at par. Only registered shareholders receive these rights, which grant their holder the eligibility to either subscribe to one new share at the offer price or trade such right on the Saudi Stock Exchange (Tadawul) pursuant to the new tradable rights framework.

The Latham team was led by partner Salman Al-Sudairi, with partner Sami Al-Louzi and counsel Omar Elsayed. Advice was also provided by associates Ibrahim Soumrany, Lee Irvine, Jonathan Pride and Raya Al-Khatib. The team worked closely with HSBC Saudi Arabia as Financial Advisor and Lead Manager.

Al-Sudairi said: “This is a crucial step for Ma’aden in becoming a global minerals player and a pillar of the Saudi Arabian economy and we are proud to advise them on this milestone transaction.”