The PIF is to acquire a “significant” minority stake in MEPCO, an integrated paper manufacturer offering products for the packaging, construction and furniture sectors. The PIF acquisition is in line with its strategy to help diversify the kingdom’s oil dependent economy and boost investment in domestic companies.
The fund will subscribe to MEPCO’s newly issued shares at $8.40 (31.50 riyals) per share, subject to obtaining the Capital Market Authority and other regulatory approvals, the company said.
The deal will expire on July 31, 2023, or upon concluding a legally binding subscription agreement between MEPCO and the PIF, whichever is earlier.
MEPCO has hired SNB Capital, while the PIF has authorized GIB Capital to advise on the deal.
According to Reuters news agency, the Saudi economy grew 8.7% last year thanks to high oil prices boosted revenue. That has led to the kingdom’s first budget surplus in almost 10 years.
The IMF accepted that Saudi GDP growth will more than halve, to 3.1 per cent, this year, in line with the forecast for Middle East oil exporters. The forecast, however, is higher than the 2.6% growth rate that the IMF projected in January, Reuters reported.
If you see something out of place or would like to contribute to this story, check out our Ethics and Policy section.
