AS&H in co-operation with Clifford Chance advises on “First of its Kind in KSA” Transaction for the Sale of Treasury Shares through a Rights Issue Mechanism

Abuhimed Alsheikh Alhagbani Law Firm (AS&H) in co-operation with Clifford Chance has advised the Saudi Investment Bank (SAIB) on the “First of its Kind” transaction for the sale of treasury shares (through a rights issue mechanism) in the Kingdom of Saudi Arabia.

A total of 9.75 million treasury shares of the SAIB were sold directly by SAIB for just under SAR 152 million (USD 40.5 million approximately) with coverage reaching 648% by the end of the offering. The transaction process followed the rights issue mechanism implemented by Tadawul, whereby SAIB’s shareholders were granted rights of priority over the treasury shares (in proportion to their shareholdings), entitling them to trade those rights in the market during the trading period, with the rights holders (being those shareholders holding the rights or new investors who have purchased the rights in the market) being entitled to purchase the shares at the end of the subscription period (as would be the case in a traditional rights issue). Specific regulatory waivers and non-objections were required for this transaction, considering its novelty in KSA.

The team was led by partner and Head of Capital Markets and Financial Regulatory - Mansoor Alhagbani, with support from Senior Associate Sultan F. Al-Fayez.

AS&H acted as transaction counsel and advised on all aspects of this transaction, including in respect of the regulatory approvals and waivers needed, the offering document to be presented to the shareholders (including drafting thereof), announcements to be made in respect of the transaction and other pertinent matters.

AS&H was previously involved in aspects of the transaction relating to the purchase of the treasury shares by SAIB.

This transaction further solidifies AS&H’s unrivalled record of advising on “First of a Kind” deals in Saudi Arabia and confirms the Firm’s repute as the “Go-To” firm for innovative and ground-breaking deals in the Kingdom.