Abu Dhabi's General Holding Corporation (Senaat) along with other minority shareholders of National Petroleum Construction Company has submitted an offer to the board of National Marine Dredging Company, a regional leader in dredging and marine construction, seeking merger of NPCC with NMDC. 

 

NPCC is a world-class engineering, procurement and construction company that provides solutions to the offshore and onshore oil and gas sector. 

 

The combined group would be one of the largest integrated oil and gas and marine services EPC players in the region with integrated 2019 revenue of AED8.875 billion.

 

The offer sets out the principal terms and conditions by which Senaat, a part of ADQ, one of the region’s largest holding companies, and other minority shareholders of NPCC would transfer NPCC to NMDC.

 

The proposed transaction would create a new national and regional integrated EPC giant with an established footprint in key markets within Mena and South Asia regions. 

 

The proposed transaction offers further value accretive elements to the combined group, including cost synergies as a result of economies of scale and scope as well as access to more bids.

 

As per the proposal, Senaat and other minority shareholders of NPCC will transfer the entire issued share capital of NPCC to NMDC. In consideration for the issued share capital transfer, NMDC would issue to Senaat and other minority shareholders of NPCC a convertible instrument, convertible into 575,000,000 ordinary shares in the combined group upon closing of the transaction. 

 

The price at which the convertible instrument will convert into shares in NMDC is AED 4.40 per share. The offer implies an equity value of NMDC of AED 1.1 billion.

 

By creating a single platform, the combined group is ideally positioned to capture growth opportunities in the UAE and in key regional markets, with strong capabilities across the value chain to support future expansion plans. 

 

The combination will also unlock value to shareholders by creating a vehicle with significant dividend payment potential in the long term as a result of its diversification, economies of scale and synergies.

 

ADQ Chief Investment Officer and Senaat Chairman Khalifa Sultan Al Suwaidi said: “As one of the largest pan-regional EPC players, this transaction will create a larger, more diversified and financially flexible national champion. By bringing together two highly complementary businesses, we will be able to successfully drive increased growth while showcasing the very best of Abu Dhabi and its industry-leading capabilities on the global stage."

 

"We are excited about the significant opportunity that can be created via this transaction, driving performance and growth to generate value not only for shareholders, but the UAE as a whole. Subject to completion of the transaction, ADQ and Senaat will also consider increasing the free float of the combined group through a follow-on public offering at a later date,” he added.-TradeArabia News Service