UAE-based Arkan Building Materials Company said it has received an offer from Abu Dhabi s Senaat for a merger with its subsidiary, Emirates Steel in exchange for the issuance of an instrument that will convert into 5.1 billion shares in Arkan’s capital.
Abu Dhabi: General Holding Corporation (Senaat), part of ADQ and the sole shareholder of Emirates Steel Industries, announced that it has submitted an offer to the Board of Arkan Building Materials Company.
The offer sets out the principal terms and conditions on which Senaat would transfer Emirates Steel, a leading integrated steel producer in the Middle East, to Arkan, a construction and building materials manufacturer in the UAE.
“We believe the combination of Emirates Steel and Arkan presents an excellent opportunity for Arkan’s shareholders, offering increased scale, financial strength, resilience, and value via a best-in-class player with international ambitions,” said Khalifa Sultan Al Suwaidi, Chairman of Senaat.
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General Holding Corporation (Senaat), a part of Abu Dhabi’s holding company ADQ, submitted an offer to combine its wholly-owned subsidiary Emirates Steel with Arkan Building Materials Company to create an industrial group with assets of Dh13 billion ($3.54bn).
Under the terms of the proposed deal, Senaat would transfer Emirates Steel to Arkan for a convertible instrument that would automatically convert into approximately 5.1 billion ordinary Arkan shares upon completion of the deal, Senaat said in a statement on Sunday.
The conversion price of the instrument is set at Dh0.798 per share, which values Arkan at about Dh1.4bn. Upon completion, Senaat would own approximately 87.5 per cent of the entire issued share capital of the combined group.
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Emirates Steel, a leading integrated steel producer in the Middle East, and SAFEEN Group, the marine service arm of Abu Dhabi Ports, both part of ADQ, have announced the commencement of transhipment operations, as part of a 10-year agreement previously signed between the two parties in 2019.
As per the agreement, SAFEEN will work closely with Emirates Steel to provide short marine shipping services for three shipments of iron ore per month and will be responsible for the purchase, rental, delivery, operation and maintenance of cargo ships, trailers, and unloading equipment for the steel manufacturer.
Serving as the company’s latest venture into the transhipment business vertical, and as one of the largest active transhipment agreements (by volume) within the Arabian Gulf region, the contract will be delivered via a converted Post-Panamax bulk – the largest bulk commercial vessel ever registered under the UAE flag – along with three self-propelled and self-disc