TIDMADES
RNS Number : 4558R
ADES International Holding PLC
08 March 2021
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF THAT
JURISDICTION.
THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT
CONSTITUTE, OR FORM PART OF, AN OFFER OR AN INVITATION TO PURCHASE,
SUBSCRIBE FOR OR SELL ANY SECURITIES OR A SOLICITATION OF ANY OFFER
TO PURCHASE, SUBSCRIBE FOR OR SELL ANY SECURITIES. THE OFFER
REFERRED TO IN THIS ANNOUNCEMENT WILL BE MADE SOLELY BY WAY OF THE
OFFER DOCUMENT AND, WHERE APPROPRIATE, THE RELATED FORM OF
ACCEPTANCE WHICH TOGETHER WILL CONTAIN THE FULL TERMS AND
CONDITIONS OF THE OFFER, INCLUDING DETAILS OF HOW THE OFFER MAY BE
ACCEPTED.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.
FOR IMMEDIATE RELEASE
8 March 2021
RECOMMED CASH OFFER FOR AND PROPOSED DELISTING OF
ADES International Holding plc ("ADES International")
by
Innovative Energy Holding Ltd ("Innovative Energy")
a newly formed company to be jointly owned by
ADES Investments Holding Ltd ("ADES Investments")
and
The Public Investment Fund of the Kingdom of Saudi Arabia (the
"Public Investment Fund")
and
Zamil Group Investment Co. ("Zamil Investments")
1. Summary
The independent directors of ADES International (the
"Independent Directors") and Innovative Energy are pleased to
announce the terms of a recommended cash offer to be made by
Innovative Energy for the entire issued and to be issued ordinary
share capital of ADES International not already owned or treated as
owned by Innovative Energy and its associates for the purposes of
the DIFC Companies Law (the "Offer").
Under the terms of the Offer, ADES Shareholders will
receive:
US$12.50 per share in cash for each ADES Share
(the "Offer Price")
The Offer Price values the existing issued share capital
(excluding Treasury Shares) of ADES International at approximately
US$516 million and the existing issued share capital (excluding
Treasury Shares) not currently owned or treated as owned by
Innovative Energy and its associates for the purposes of the DIFC
Companies Law at approximately US$161 million.
The Offer Price to be paid by Innovative Energy represents a
premium of:
-- approximately 40 per cent. to the Closing Price of US$8.95
per ADES Share on 5 March 2021 (being the last Business Day prior
to the date of this announcement);
-- approximately 36 per cent. to ADES International's
volume-weighted average price ("VWAP") of US$9.20 per ADES Share
for the 30 day period ended 5 March 2021;
-- approximately 32 per cent. to the VWAP of US$9.49 per ADES
Share for the 90 day period ended 5 March 2021; and
-- approximately 35 per cent. to the VWAP of US$9.27 per ADES
Share for the 12 months ended 5 March 2021.
Pursuant to an implementation agreement entered into between
Innovative Energy and ADES International dated 8 March 2021 (the
"Implementation Agreement") (the terms of which are further
described in paragraph 14 of the full text of this announcement),
ADES International has agreed that, if the Offer becomes, or is
declared, unconditional in all respects, it will make an
application to the Financial Conduct Authority (the "FCA") for the
cancellation of the listing of the ADES Shares from the Standard
Segment of the Official List of the FCA (the "Official List") and
to London Stock Exchange plc (the "London Stock Exchange") for the
cancellation of the admission to trading of the ADES Shares on the
London Stock Exchange's main market for listed securities (the
"Main Market").
As at the date of this announcement, Innovative Energy is wholly
owned by ADES Investments. Subject only to the Offer becoming, or
being declared, unconditional in all respects, the Public
Investment Fund has agreed to subscribe for shares in Innovative
Energy in order to provide Innovative Energy with the financing
required to acquire the ADES Shares from ADES Shareholders who
accept the Offer in respect of their ADES Shares.
Each of ADES Investments and Zamil Investments has agreed with
Innovative Energy that, by not later than the date on which the
Offer becomes, or is declared, unconditional in all respects, it
will contribute its holdings of ADES Shares to Innovative Energy in
exchange for ordinary shares in the capital of Innovative
Energy.
As at the date of this announcement:
(a) 26,349,242 ADES Shares are held by ADES Investments,
representing approximately 63.9 per cent. of ADES International's
existing issued share capital (excluding Treasury Shares); and
(b) 2,033,848 ADES Shares are held by Zamil Investments,
representing approximately 4.9 per cent. of ADES International's
existing issued share capital (excluding Treasury Shares).
As at the date of this announcement, Innovative Energy and the
Public Investment Fund do not hold any ADES Shares.
It is intended that the Offer will be implemented by means of a
contractual takeover offer for the purposes of Part 7 of the DIFC
Companies Law. Innovative Energy reserves the right, subject to the
consent of ADES International, to effect the Offer by way of a
scheme of arrangement in accordance with Part 9 of the DIFC
Companies Law. The Offer will not extend to any ADES Shares held by
ADES Investments or Zamil Investments.
THE OFFER IS NOT GOVERNED BY THE TERMS OF THE CITY CODE ON
TAKEOVERS AND MERGERS OR THE DUBAI FINANCIAL SERVICES AUTHORITY
TAKEOVER RULES.
In connection with the Offer, ADES International will also be
seeking the approval of ADES Shareholders in respect of the
Disapplication Resolution which will seek the approval of ADES
Shareholders for the disapplication of pre-emption rights in
relation to the sale, for cash, of the ADES Shares currently held
by ADES International as Treasury Shares for the purposes of Part 7
of the DIFC Companies Law. As at the date of this announcement,
ADES International holds 2,544,382 ADES Shares as Treasury Shares,
representing approximately 5.8 per cent. of the fully diluted share
capital of ADES International (including the Treasury Shares).
Pursuant to the Implementation Agreement, ADES International has
agreed with Innovative Energy that, subject to the passing of the
Disapplication Resolution, it will accept the Offer in respect of
the Treasury Shares in accordance with the procedure for acceptance
to be set out in the Offer Document as soon as reasonably
practicable and in any event by no later than two Business Days
after the passing of the Disapplication Resolution. A notice of
general meeting, setting out the Disapplication Resolution, is
expected to be published by ADES International on or before the
date falling 10 days from the date on which the Offer Document is
published.
2. Background to and reasons for the Offer and proposed delisting
Offer rationale
Innovative Energy believes that the Offer represents an
attractive opportunity to gain exposure to the oil and gas drilling
and production services sector in the Middle East and North Africa
(" MENA") region. ADES International is well positioned to serve
its clients in providing their requirements and value-added
solutions to their operations. Innovative Energy sees the merits in
ADES International's client relationships, predictable cash flow,
significant backlog and low-cost business model.
Innovative Energy recognises the progress achieved by the
management team of ADES International in its implementation and
current execution of its strategy to become a major oil and gas
drilling services provider in the MENA region. Innovative Energy
sees the strength in ADES International's value proposition, which
will drive further growth opportunities with existing and new
clients, while maintaining discipline in its capital allocation and
capital structure.
As a long-term and strategic investor, ADES Investments as a
shareholder in Innovative Energy is strongly positioned to support
ADES International in its continued growth to deliver on its
success.
It is intended that, within one year of completion of the Offer,
the operational headquarters of the ADES International Group will
be relocated to the Kingdom of Saudi Arabia.
Innovative Energy believes that the Offer is in the best
interests of ADES Shareholders, as it allows them to realise an
upfront attractive cash premium for their ADES Shares. The Offer
Price to be paid by Innovative Energy represents a premium of:
-- approximately 40 per cent. to the Closing Price of US$8.95
per ADES Share on 5 March 2021 (being the last Business Day prior
to the date of this announcement);
-- approximately 36 per cent. to ADES International's VWAP of
US$9.20 per ADES Share for the 30 day period ended 5 March
2021;
-- approximately 32 per cent. to the VWAP of US$9.49 per ADES
Share for the 90 day period ended 5 March 2021; and
-- approximately 35 per cent. to the VWAP of US$9.27 per ADES
Share for the 12 months ended 5 March 2021.
Furthermore, the Offer in cash provides an immediate and certain
exit opportunity for ADES Shareholders in an accelerated and
de-risked manner.
Delisting rationale
ADES International was originally listed on the FCA's Official
List and the ADES Shares were admitted to trading on the London
Stock Exchange's Main Market in 2017 in order to access a deeper
pool of professional investors to raise capital (a) to allow the
company to seize an attractive market opportunity, (b) to seize
growth in the business by purchasing and refurbishing rigs and
other assets, and (c) for general corporate purposes.
ADES International's listing, and its subsequent acquisition of
34 rigs from entities such as Nabors Industry Ltd. and Weatherford
Drilling International, enabled it to transform itself from a
company that was predominantly focused on offshore services in
Egypt (with a smaller presence in the Kingdom of Saudi Arabia and
Algeria) into a regional player that provides both offshore and
onshore services, with significant market positions in the Kingdom
of Saudi Arabia, Kuwait, Egypt and Algeria.
The operational performance of ADES International has been
strong in recent years. Revenue increased from US$157.6 million to
US$477.8 million, EBITDA increased from US$80.3 million to US$193.4
million and backlog increased from US$427 million to US$1,307
million, in each case from 2017 to 2019. These increases have been
achieved through a combination of organic growth and acquisitions.
However, the share price performance of ADES International has
decreased by 25.5 per cent. during the same period and the average
daily trading liquidity (ADTV) has averaged 38,888 shares.
Whilst the listing and admission to trading of the ADES Shares
in 2017 has supported the growth of ADES International's business,
Innovative Energy believes that the original rationale for listing
ADES Shares is now less compelling, and that the long term
prospects of ADES International may be better served through
private ownership, due to the fact that:
-- ADES International attracts negligible trading volumes which
do not justify the requirements and associated costs with
maintaining its public listing;
-- ADES International faces increased challenges in raising
capital efficiently and optimally given the aforementioned share
price performance and volume levels; and
-- as a private company, Innovative Energy believes that the
business will benefit from a longer term approach to strategy and
decision making and that ADES International will have greater
flexibility to pursue strategic opportunities, including in
relation to capital allocation and growth. For example, Innovative
Energy believes that ADES International will be able to gain
further exposure in underserved areas of the Middle East market as
well as continuing to compete in its existing markets.
3. Recommendation
The Independent Directors of ADES International consider the
terms of the Offer to be fair and reasonable so far as the ADES
Shareholders are concerned.
Accordingly, the Independent Directors of ADES International
intend unanimously to recommend that ADES Shareholders accept the
Offer.
The background to and reasons for the Independent Directors
intention unanimously to recommend the Offer are set out in
paragraph 6 of the full text of this announcement.
As at the date of this announcement, the Independent Directors
of ADES International are not interested in any ADES Shares.
4. ADES Director Intentions
Those ADES Directors who are also ADES Shareholders intend to
(a) accept or procure acceptance of the Offer, and (b) vote in
favour of the Disapplication Resolution, in each case in respect of
their own beneficial holdings as set out below:
Name of ADES Director Interest in ADES Total interest as
Shares a percentage of ADES
International's existing
issued share capital
(excluding Treasury
Shares)
---------------------------------------- ----------------------------- --------------------------------------
Mohamed Farouk Abdelkhalek 912,928 2.2%
Ulf Henriksson 36,363 0.1%
Total 949,291 2.3%
5. General
The Offer will be subject to the full terms and conditions to be
set out in the Offer Document and, in respect of ADES Shares held
in certificated form, the Form of Acceptance when issued, which
will include, inter alia, details of the circumstances in which the
conditions to the Offer will be satisfied or may be waived. The
conditions to the Offer shall be the following:
-- Innovative Energy receiving valid acceptances in respect of
not less than 8,768,741 ADES Shares (or such lesser number of ADES
Shares as Innovative Energy may decide), which represent not less
than approximately 56.9 per cent. of the existing share capital of
ADES International, including the Treasury Shares but excluding
those ADES Shares which, as at the date of this announcement, are
held by ADES Investments and Zamil Investments;
-- the Disapplication Resolution being duly passed by the
requisite number of ADES Shareholders at a general meeting of ADES
International; and
-- any antitrust clearance required having been received, or the
relevant waiting period having expired, in each case under the
merger control regime in the Kingdom of Saudi Arabia with respect
to the Offer.
Pursuant to the Implementation Agreement, ADES International has
agreed that, if the Offer becomes, or is declared, unconditional in
all respects, it will make an application to the FCA for the
cancellation of the listing of the ADES Shares from the Standard
Segment of the Official List and to the London Stock Exchange for
the cancellation of the admission to trading of the ADES Shares on
the London Stock Exchange's Main Market. It is anticipated that the
cancellation of the listing on the Standard Segment of the Official
List and the admission to trading on the London Stock Exchange's
Main Market will take effect no earlier than 20 Business Days after
the date on which the Offer becomes, or is declared, unconditional
in all respects.
Following the Offer becoming, or being declared, unconditional
in all respects and the ADES Shares having been delisted,
Innovative Energy intends to procure that ADES International be
re-registered as a DIFC private limited company.
The delisting of the ADES Shares and the re-registration of ADES
International as a private limited company will significantly
reduce the liquidity and marketability of any ADES Shares in
respect of which the Offer has not been accepted at that time and
their value may be affected as a consequence. Any remaining ADES
Shareholders will, in this case, become minority shareholders in a
majority controlled private limited company and may therefore be
unable to sell their ADES Shares. There can be no certainty that
ADES International will pay any further dividends or other
distributions in this case, or that such minority ADES Shareholders
will again be offered an opportunity to sell their ADES Shares on
terms which are equivalent to or no less advantageous than those
under the Offer.
If Innovative Energy, by virtue of acceptances of the Offer,
acquires or contracts to acquire not less than nine-tenths ((9)
/(10) ) in value of the ADES Shares to which the Offer relates and
the Offer becomes, or is declared, unconditional in all respects,
Innovative Energy intends to exercise its rights pursuant to
Article 98 of the DIFC Companies Law to acquire compulsorily the
remaining ADES Shares in respect of which it has not received
acceptances of the Offer on the same terms as the Offer (the
"Compulsory Acquisition" ). The acceptance condition to the Offer
may be satisfied or waived in circumstances in which the threshold
for commencing the Compulsory Acquisition procedure has not yet
been reached.
The Offer will become, or be declared, unconditional in all
respects only if the conditions to the Offer have been satisfied
or, where applicable, waived. Subject to the satisfaction or, where
applicable, waiver of the conditions, it is expected that
completion of the Offer will occur during Q2 2021.
The Offer Document, containing the full terms and conditions of
the Offer and certain further information about the Offer, together
with, in respect of ADES Shares held in certificated form, the Form
of Acceptance accompanying the Offer Document, will be sent to ADES
Shareholders in due course and the Offer Document will be made
available on ADES International's website at
http://investors.adihgroup.com/ as soon as practicable following
the announcement that the Offer Document has been posted to ADES
Shareholders.
This summary should be read in conjunction with, and is subject
to, the full text of the following announcement (including its
Appendices). The Offer will be subject to the full terms and
conditions to be set out in the Offer Document and, in respect of
ADES Shares held in certificated form, Form of Acceptance. Appendix
1 contains the sources and bases of certain information contained
in this summary and the following announcement. Appendix 2 contains
the definitions of certain terms used in this summary and the
following announcement.
EFG Hermes UAE Limited ("EFG Hermes") is acting as financial
adviser to ADES Investments and Innovative Energy in relation to
the Offer. Moelis & Company UK LLP ("Moelis & Company") is
acting as financial adviser to the Public Investment Fund in
relation to the Offer.
Ashurst LLP is acting as legal adviser to ADES Investments in
relation to the Offer. Allen & Overy LLP is acting as legal
adviser to the Public Investment Fund in relation to the Offer.
Hill Dickinson LLP is acting as legal adviser to ADES International
in relation to the Offer.
Investec Bank plc ("Investec") and Canaccord Genuity Limited
("Canaccord") act as joint corporate brokers for ADES
International.
Enquiries:
ADES International Tel: +202 385 25354 (Ext.
350)
Hussein Badawy
Innovative Energy Tel: +202 385 25354 (Ext.
400)
Legal Department
EFG Hermes (financial adviser Tel: +9714 363 4023
to ADES Investments and Innovative
Energy)
Mohamed Fahmi
Mohamed Abou Samra
Nour Fahmy
Moelis & Company (financial Tel: +971 4 304 5000
adviser to the Public Investment
Fund)
Rami Touma
Liam Beere
Wouter Leemhuis
Amit Kumar
Andrew Coates
Investec Bank plc (joint corporate Tel: +44 (0)207 597 5712
broker to ADES International)
Chris Sim
Canaccord Genuity Limited (joint Tel: +44 (0)207 523 8000
corporate broker to ADES International)
Henry Fitzgerald-O'Connor
James Asensio
ADES International LEI Number: 213800WADXE5U3ZY1K46
Important Notice
This announcement is for information purposes only and is not
intended to and does not constitute, or form part of, an offer,
invitation or the solicitation of an offer to purchase, otherwise
acquire, subscribe for, sell or otherwise dispose of any
securities, or the solicitation of any vote or approval in any
jurisdiction, pursuant to the Offer or otherwise, nor shall there
be any sale, issuance or transfer of securities of ADES
International in any jurisdiction in contravention of applicable
law.
The Offer will be made solely by means of the Offer Document
and, in respect of ADES Shares held in certificated form, the Form
of Acceptance accompanying the Offer Document, which will contain
the full terms and conditions of the Offer including details of how
to accept the Offer. Any approval, acceptance, decision or other
response to the Offer should be made only on the basis of the
information in the Offer Document and, in respect of ADES Shares
held in certificated form, the Form of Acceptance. ADES
Shareholders are strongly advised to read the formal documentation
in relation to the Offer once it has been despatched.
EFG Hermes, which is authorised regulated by the Dubai Financial
Services Authority in the Dubai International Financial Centre, is
acting as financial adviser exclusively for ADES Investments and
Innovative Energy and no one else in connection with the matters
set out in this announcement and will not regard any other person
as its client in relation to the matters set out in this
announcement and will not be responsible to anyone other than ADES
Investments and Innovative Energy for providing the protections
afforded to clients of EFG Hermes or its affiliates, nor for
providing advice in relation to the contents of this announcement
or any other matter referred to herein. Neither EFG Hermes nor any
of its subsidiaries, branches or affiliates owes or accepts any
duty, liability or responsibility whatsoever (whether direct or
indirect, whether in contract, in tort, under statute or otherwise)
to any person who is not a client of EFG Hermes in connection with
this announcement, any statement contained herein or otherwise.
Moelis & Company, which is authorised and regulated by the
FCA in the United Kingdom, is acting as financial adviser
exclusively for the Public Investment Fund and no one else in
connection with the matters set out in this announcement and will
not regard any other person as its client in relation to the
matters set out in this announcement and will not be responsible to
anyone other than the Public Investment Fund for providing the
protections afforded to clients of Moelis & Company, nor for
providing advice in relation to the contents of this announcement
or any other matter referred to herein. Neither Moelis &
Company nor any of its subsidiaries, branches or affiliates owes or
accepts any duty, liability or responsibility whatsoever (whether
direct or indirect, whether in contract, in tort, under statute or
otherwise) to any person who is not a client of Moelis &
Company in connection with this announcement, any statement
contained herein or otherwise.
Investec, which is authorised in the United Kingdom by the
Prudential Regulation Authority ("PRA") and regulated by the FCA
and the PRA, and Canaccord, which is authorised and regulated in
the United Kingdom by the FCA, are acting as joint corporate
brokers for ADES International and no one else and will not regard
any other person as their client in relation to the matters set out
in this announcement and will not be responsible to anyone other
than ADES International for providing the protections afforded to
their respective clients. Neither Investec, Canaccord nor any of
their respective subsidiaries, branches or affiliates owe or accept
any duty, liability or responsibility whatsoever (whether direct or
indirect, whether in contract, in tort, under statute or otherwise)
to any person in connection with this announcement, any statement
contained herein or otherwise.
Overseas Shareholders
This announcement has been prepared in accordance with English
law and the information disclosed may not be the same as that which
would have been prepared in accordance with the laws of
jurisdictions outside England. The statements contained in this
announcement are made as at the date of this announcement, unless
some other time is specified in relation to them, and there shall
be no implication that there has been no change in the facts set
forth in this announcement since such date.
The release, publication or distribution of this announcement
and the availability of the Offer in or into jurisdictions other
than the United Kingdom may be affected by the laws and regulations
of those jurisdictions. Persons who are not resident in the United
Kingdom, or who are subject to the laws of any jurisdiction other
than the United Kingdom, should inform themselves about, and
observe any applicable requirements. Any person (including, without
limitation, nominees, trustees and custodians) who would, or
otherwise intends to, forward this announcement, the Offer Document
or any accompanying document to any jurisdiction outside the United
Kingdom should refrain from doing so and seek appropriate
professional advice before taking any action. Any failure to comply
with the applicable legal or regulatory requirements may constitute
a violation of the laws and/or regulations of any such
jurisdiction. To the fullest extent permitted by applicable law,
the companies and persons involved in the Offer disclaim any
responsibility and liability for the violation of such restrictions
by any person. Further details in relation to Overseas Shareholders
will be contained in the Offer Document.
Unless otherwise determined by Innovative Energy, and permitted
by applicable law and regulation, the Offer will not be made,
directly or indirectly, in or into or by use of the mails or any
other means or instrumentality (including, without limitation,
telephonic or electronic) of interstate or foreign commerce of, or
any facility of a national, state or other securities exchange of,
a Restricted Jurisdiction, and no person may accept the Offer by
any such use, means, instrumentality or facility or from within a
Restricted Jurisdiction. Accordingly, copies of this announcement
and the formal documentation relating to the Offer are not being,
and must not be, directly or indirectly, mailed or otherwise
forwarded or distributed in, into or from a Restricted Jurisdiction
and persons receiving this announcement (including custodians,
nominees and trustees) must not distribute or send it into or from
a Restricted Jurisdiction.
In accordance with normal United Kingdom market practice and
subject to applicable regulatory requirements, including Rule 14e-5
under the US Securities and Exchange Act of 1934, Innovative Energy
or its nominees or brokers (acting as agents) may from time to time
whilst the Offer remains open for acceptance make certain purchases
of, or arrangements to purchase, ADES Shares otherwise than under
the Offer, such as in the open market or through privately
negotiated purchases. Such purchases, or arrangements to purchase,
shall comply with applicable rules in the United Kingdom and the
rules of the London Stock Exchange. Details about any such
purchases will be available from any Regulatory Information
Service.
Cautionary note regarding forward looking statements
This announcement contains certain statements which are, or may
be deemed to be, "forward-looking statements" which are prospective
in nature. The words "believe", "anticipate", "expect", "intend",
"aim", "plan", "predict", "continue", "assume", "positioned",
"may", "will", "should", "shall", "risk" and other similar
expressions that are predictions of or indicate future events and
future trends identify forward-looking statements. These
forward-looking statements include all matters that are not current
or historical facts. By their nature, forward-looking statements
involve risks and uncertainties because such statements relate to
events and depend on circumstances that may or may not occur in the
future. Forward-looking statements are not indicative of future
performance and Innovative Energy's or ADES International's actual
results of operations, financial condition and liquidity, and the
development of the industry in which Innovative Energy or ADES
International sources operates, may differ materially from those
made in or suggested by the forward-looking statements contained in
this announcement. The cautionary statements set out above should
be considered in connection with any subsequent written or oral
forward-looking statements that Innovative Energy, or persons
acting on its behalf, may issue.
No profit forecasts or estimates
Nothing in this announcement is intended or shall be deemed to
be a forecast, projection or estimate of the future financial
performance of Innovative Energy or ADES International and no
statement in this announcement should be interpreted to mean that
earnings or earnings per share of Innovative Energy or ADES
International (where relevant) for the current or future financial
years would necessarily match or exceed the historical published
earnings or earnings per share for Innovative Energy or ADES
International, as appropriate.
Publication on website
A copy of this announcement will be available, subject to
certain restrictions relating to persons resident in Restricted
Jurisdictions, on ADES International's website at
http://investors.adihgroup.com/ as soon as practicable following
the date of this announcement. For the avoidance of doubt, the
content of the website is not incorporated into and does not form
part of this announcement.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF THAT
JURISDICTION.
THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT
CONSTITUTE, OR FORM PART OF, AN OFFER OR AN INVITATION TO PURCHASE,
SUBSCRIBE FOR OR SELL ANY SECURITIES OR A SOLICITATION OF ANY OFFER
TO PURCHASE, SUBSCRIBE FOR OR SELL ANY SECURITIES. THE OFFER
REFERRED TO IN THIS ANNOUNCEMENT WILL BE MADE SOLELY BY WAY OF THE
OFFER DOCUMENT AND, WHERE APPROPRIATE, THE RELATED FORM OF
ACCEPTANCE WHICH TOGETHER WILL CONTAIN THE FULL TERMS AND
CONDITIONS OF THE OFFER, INCLUDING DETAILS OF HOW THE OFFER MAY BE
ACCEPTED.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.
8 March 2021
RECOMMED CASH OFFER FOR AND PROPOSED DELISTING OF
ADES International Holding plc ("ADES International")
by
Innovative Energy Holding Ltd ("Innovative Energy")
a newly formed company to be jointly owned by
ADES Investments Holding Ltd ("ADES Investments")
and
The Public Investment Fund of the Kingdom of Saudi Arabia
("Public Investment Fund")
and
Zamil Group Investment Co. ("Zamil Investments")
1. Introduction
The independent directors of ADES International (the
"Independent Directors") and Innovative Energy are pleased to
announce the terms of a recommended cash offer to be made by
Innovative Energy for the entire issued and to be issued ordinary
share capital of ADES International not already owned or treated as
owned by Innovative Energy and its associates for the purposes of
the DIFC Companies Law (the "Offer").
Innovative Energy is a newly formed company incorporated for the
purposes of the Offer. Following completion of the Offer,
Innovative Energy will be jointly owned by ADES Investments Holding
Ltd ("ADES Investments"), the Public Investment Fund of the Kingdom
of Saudi Arabia ("Public Investment Fund"), and Zamil Group
Investment Co. ("Zamil Investments").
2. The Offer and proposed delisting
The Offer, which will be subject to the full terms and
conditions to be set out in the Offer Document and, in respect of
ADES Shares held in certificated form, the Form of Acceptance, will
be made on the following basis:
US$12.50 per share in cash for each ADES Share
(the "Offer Price")
The Offer Price values the total existing issued share capital
(excluding Treasury Shares) of ADES International at approximately
US$516 million and the existing issued share capital (excluding
Treasury Shares) not currently owned or treated as owned by
Innovative Energy and its associates for the purposes of the DIFC
Companies Law at approximately US$161 million.
The Offer Price to be paid by Innovative Energy represents a
premium of:
-- approximately 40 per cent. to the Closing Price of US$8.95
per ADES Share on 5 March 2021 (being the last Business Day prior
to the date of this announcement);
-- approximately 36 per cent. to ADES International's
volume-weighted average price ("VWAP") of US$9.20 per ADES Share
for the 30 day period ended 5 March 2021;
-- approximately 32 per cent. to the VWAP of US$9.49 per ADES
Share for the 90 day period ended 5 March 2021; and
-- approximately 35 per cent. to the VWAP of US$9.27 per ADES
Share for the 12 months ended 5 March 2021.
Pursuant to an implementation agreement entered into between
Innovative Energy and ADES International dated 8 March 2021 (the
"Implementation Agreement") (the terms of which are further
described in paragraph 14 of the full text of this announcement),
ADES International has agreed that, if the Offer becomes, or is
declared, unconditional in all respects, it will make an
application to the Financial Conduct Authority (the "FCA") for the
cancellation of the listing of the ADES Shares from the Standard
Segment of the Official List of the FCA (the "Official List") and
to London Stock Exchange plc (the "London Stock Exchange") for the
cancellation of the admission to trading of the ADES Shares on the
London Stock Exchange's main market for listed securities (the
"Main Market").
As at the date of this announcement, Innovative Energy is wholly
owned by ADES Investments. Subject only to the Offer becoming, or
being declared, unconditional in all respects, the Public
Investment Fund has agreed to subscribe for shares in Innovative
Energy in order to provide Innovative Energy with the financing
required to acquire the ADES Shares from ADES Shareholders who
accept the Offer in respect of their ADES Shares.
Each of ADES Investments and Zamil Investments has agreed with
Innovative Energy that, by not later than the date on which the
Offer becomes, or is declared, unconditional in all respects, it
will contribute its holdings of ADES Shares to Innovative Energy in
exchange for ordinary shares in the capital of Innovative
Energy.
As at the date of this announcement:
(a) 26,349,242 ADES Shares are held by ADES Investments,
representing approximately 63.9 per cent. of ADES International's
existing issued share capital (excluding Treasury Shares); and
(b) 2,033,848 ADES Shares are held by Zamil Investments,
representing approximately 4.9 per cent. of ADES International's
existing issued share capital (excluding Treasury Shares).
As at the date of this announcement, Innovative Energy and the
Public Investment Fund do not hold any ADES Shares.
It is intended that the Offer will be implemented by means of a
contractual takeover offer for the purposes of Part 7 of the DIFC
Companies Law. Innovative Energy reserves the right, subject to the
consent of ADES International, to effect the Offer by way of a
scheme of arrangement in accordance with Part 9 of the DIFC
Companies Law. The Offer will not extend to any ADES Shares held by
ADES Investments or Zamil Investments.
THE OFFER IS NOT GOVERNED BY THE TERMS OF THE CITY CODE ON
TAKEOVERS AND MERGERS OR THE DUBAI FINANCIAL SERVICES AUTHORITY
TAKEOVER RULES.
3. Background to and reasons for the Offer and possible delisting
Offer rationale
Innovative Energy believes that the Offer represents an
attractive opportunity to gain exposure to the oil and gas drilling
and production services sector in the Middle East and North Africa
(" MENA") region. ADES International is well positioned to serve
its clients in providing their requirements and value-added
solutions to their operations. Innovative Energy sees the merits in
ADES International's client relationships, predictable cash flow,
significant backlog and low-cost business model.
Innovative Energy recognises the progress achieved by the
management team of ADES International in its implementation and
current execution of its strategy to become a major oil and gas
drilling services provider in the MENA region. Innovative Energy
sees the strength in ADES International's value proposition, which
will drive further growth opportunities with existing and new
clients, while maintaining discipline in its capital allocation and
capital structure.
As a long-term and strategic investor, ADES Investments as a
shareholder in Innovative Energy is strongly positioned to support
ADES International in its continued growth to deliver on its
success.
It is intended that, within one year of completion of the Offer,
the operational headquarters of the ADES International Group will
be relocated to the Kingdom of Saudi Arabia.
Innovative Energy believes that the Offer is in the best
interests of ADES Shareholders, as it allows them to realise an
upfront attractive cash premium for their ADES Shares. The Offer
Price to be paid by Innovative Energy represents a premium of:
-- approximately 40 per cent. to the Closing Price of US$8.95
per ADES Share on 5 March 2021 (being the last Business Day prior
to the date of this announcement);
-- approximately 36 per cent. to ADES International's VWAP of
US$9.20 per ADES Share for the 30 day period ended 5 March
2021;
-- approximately 32 per cent. to the VWAP of US$9.49 per ADES
Share for the 90 day period ended 5 March 2021; and
-- approximately 35 per cent. to the VWAP of US$9.27 per ADES
Share for the 12 months ended 5 March 2021.
Furthermore, the Offer in cash provides an immediate and certain
exit opportunity for ADES Shareholders in an accelerated and
de-risked manner.
Delisting rationale
ADES International was originally listed on the FCA's Official
List and the ADES Shares were admitted to trading on the London
Stock Exchange's Main Market in 2017 in order to access a deeper
pool of professional investors to raise capital (a) to allow the
company to seize an attractive market opportunity, (b) to seize
growth in the business by purchasing and refurbishing rigs and
other assets, and (c) for general corporate purposes.
ADES International's listing, and its subsequent acquisition of
34 rigs from entities such as Nabors Industry Ltd. and Weatherford
Drilling International, enabled it to transform itself from a
company that was predominantly focused on offshore services in
Egypt (with a smaller presence in the Kingdom of Saudi Arabia and
Algeria) into a regional player that provides both offshore and
onshore services, with significant market positions in the Kingdom
of Saudi Arabia, Kuwait, Egypt and Algeria.
The operational performance of ADES International has been
strong in recent years. Revenue increased from US$157.6 million to
US$477.8 million, EBITDA increased from US$80.3 million to US$193.4
million and backlog increased from US$427 million to US$1,307
million, in each case from 2017 to 2019. These increases have been
achieved through a combination of organic growth and acquisitions.
However, the share price performance of ADES International has
decreased by 25.5 per cent. during the same period and the average
daily trading liquidity (ADTV) has averaged 38,888 shares.
Whilst the listing and admission to trading of the ADES Shares
in 2017 has supported the growth of ADES International's business,
Innovative Energy believes that the original rationale for listing
ADES Shares is now less compelling, and that the long term
prospects of ADES International may be better served through
private ownership, due to the fact that:
-- ADES International attracts negligible trading volumes which
do not justify the requirements and associated costs with
maintaining its public listing;
-- ADES International faces increased challenges in raising
capital efficiently and optimally given the aforementioned share
price performance and volume levels; and
-- as a private company, Innovative Energy believes that the
business will benefit from a longer term approach to strategy and
decision making and that ADES International will have greater
flexibility to pursue strategic opportunities, including in
relation to capital allocation and growth. For example, Innovative
Energy believes that ADES International will be able to gain
further exposure in underserved areas of the Middle East market as
well as continuing to compete in its existing markets.
4. Financing of the Offer and ownership of Innovative Energy
As at the date of this announcement, Innovative Energy is wholly
owned by ADES Investments. Subject only to the Offer becoming, or
being declared, unconditional in all respects, the Public
Investment Fund has agreed to subscribe for shares in Innovative
Energy in order to provide Innovative Energy with the financing
required to acquire the ADES Shares from ADES Shareholders who
accept the Offer in respect of the ADES Shares. The cash
consideration payable to ADES Shareholders under the terms of the
Offer will be financed by means of an equity contribution by the
Public Investment Fund to Innovative Energy to be satisfied by the
cash resources of the Public Investment Fund.
Each of ADES Investments and Zamil Investments has agreed with
Innovative Energy that, by not later than the date on which the
Offer becomes, or is declared, unconditional in all respects, it
will contribute its holdings of ADES Shares to Innovative Energy in
exchange for ordinary shares in the capital of Innovative
Energy.
5. Recommendation
The Independent Directors of ADES International consider the
terms of the Offer to be fair and reasonable so far as the ADES
Shareholders are concerned.
Accordingly, the Independent Directors of ADES International
intend unanimously to recommend that ADES Shareholders accept the
Offer.
As at the date of this announcement, the Independent Directors
of ADES International are not interested in any ADES Shares.
6. Background to and reasons for recommending the Offer
Following an initial approach from ADES Investments, the board
of ADES International formed an independent committee (comprising
Hatem Soliman, Mohamed Walid Cherif and Nabil Kassem, each being
Independent Directors) in connection with the Offer. This
independent committee (together with Yasser Hasem as the remaining
Independent Director) agreed with Innovative Energy an Offer Price
of US$12.50 per ADES Share.
The Independent Directors of ADES International believe that the
Offer is in the best interests of ADES Shareholders, as it allows
them to realise an upfront attractive cash premium for their ADES
Shares. The Offer Price to be paid by Innovative Energy represents
a premium of:
-- approximately 40 per cent. to the Closing Price of US$8.95
per ADES Share on 5 March 2021 (being the last Business Day prior
to the date of this announcement);
-- approximately 36 per cent. to ADES International's VWAP of
US$9.20 per ADES Share for the 30 day period ended 5 March
2021;
-- approximately 32 per cent. to the VWAP of US$9.49 per ADES
Share for the 90 day period ended 5 March 2021; and
-- approximately 35 per cent. to the VWAP of US$9.27 per ADES
Share for the 12 months ended 5 March 2021.
The Independent Directors believe, based on their commercial
assessments of the Offer that this is an attractive premium to ADES
International's prevailing share price over the past 12 months.
Furthermore, the Offer in cash provides an immediate and certain
exit opportunity for ADES Shareholders in an accelerated and
de-risked manner.
The Independent Directors have taken into consideration the poor
performance of ADES International's share price relative to ADES
International's operating and financial performance over the past
three years and the fact that trading in ADES Shares has been
increasingly illiquid, particularly in the past 18 months.
The Offer, if successful, will allow ADES Shareholders to
realise, in cash in the near-term, their investment in ADES
International at a significant premium to ADES International's
current share price as well as create a viable liquidity event that
would allow ADES Shareholders to exit an increasingly illiquid
stock.
It is for these reasons that the Independent Directors of ADES
International believe that the terms of the Offer are fair and
reasonable and intend unanimously to recommend ADES Shareholders to
accept the Offer.
7. ADES Director intentions
The ADES Directors who are also ADES Shareholders intend to (a)
accept or procure acceptance of the Offer, and (b) vote in favour
of the Disapplication Resolution, in each case in respect of their
own beneficial holdings as set out below:
Name of ADES Director Interest in Total interest as
ADES Shares a percentage of ADES
International's existing
issued share capital
(excluding Treasury
Shares)l
---------------------------------------- ------------------------- --------------------------------------
Mohamed Farouk Abdelkhalek 912,928 2.2%
Ulf Henriksson 36,363 0.1%
Total 949,291 2.3%
8. Information relating to Innovative Energy, ADES Investments,
the Public Investment Fund and Zamil Investments
8.1 Innovative Energy
Innovative Energy is a newly incorporated company, incorporated
in the DIFC, formed for the purposes of implementing the Offer.
Innovative Energy is currently a wholly-owned subsidiary of ADES
Investments. Innovative Energy was incorporated on 4 March 2021,
with registered number 4509. The current directors of Innovative
Energy are Mr. Ayman Abbas and Dr. Mohamed Farouk Abdelkhalek.
Innovative Energy has not traded since incorporation, has paid no
dividends and has not entered into any obligations other than in
connection with the Offer.
8.2 ADES Investments
ADES Investments is a company limited by shares incorporated on
28 July 2016 under the Companies Law - DIFC Law No. 2 of 2009. ADES
Investments is owned 67 per cent. by Intro Investments Holding Ltd
(which is owned by the Abbas family) and 33 per cent. by Sky
Investments Holding Ltd (which is owned by the Hussein family). The
nature of the business of ADES Investments is that of an investment
holding company. ADES Investments otherwise conducts no business or
trade.
As at the date of this announcement, ADES Investments holds
26,349,242 ADES Shares, representing approximately 63.9 per cent.
of ADES International's existing issued share capital (excluding
Treasury Shares). ADES Investments has agreed with Innovative
Energy that, by not later than the date on which the Offer becomes,
or is declared, unconditional in all respects, it will contribute
its entire holding of ADES Shares to Innovative Energy in exchange
for ordinary shares in the capital of Innovative Energy.
8.3 The Public Investment Fund
The Public Investment Fund is one of the largest and most
impactful sovereign wealth funds in the world, driving the economic
transformation of Saudi Arabia for the benefit of its people while
helping shape the future global economy. PIF is building a
world-class portfolio through investments in attractive, long-term
opportunities across diverse industries and asset classes
internationally, while unlocking new sectors at home. PIF works
alongside global strategic partners and renowned investment
managers, and acts as the Kingdom of Saudi Arabia's primary
investment arm aiming toward generating long-term value for the
Kingdom of Saudi Arabia in line with Vision 2030.
8.4 Zamil Investments
Zamil Group Investment Co. is the investment arm of Zamil Group,
a family-owned holding company founded in 1920 and headquartered in
Saudi Arabia. Zamil Group has built a diversified investment
portfolio across various industry sectors operating businesses in
building materials, manufacturing, ship building and offshore
operations, petrochemicals, trade and services, real estate, and
investments. With the motto 'Partners in Nation Building', Zamil
Group remains dedicated to adding value to all its stakeholders as
a proud and responsible corporate citizen.
As at the date of this announcement, Zamil Investments holds
2,033,848 ADES Shares, representing approximately 4.9 per cent. of
ADES International's existing issued share capital (excluding
Treasury Shares). Zamil Investments has agreed with Innovative
Energy that, by not later than the date on which the Offer becomes,
or is declared, unconditional in all respects, it will contribute
its entire holding of ADES Shares to Innovative Energy in exchange
for ordinary shares in the capital of Innovative Energy.
9. Information relating to ADES International
ADES International is a major oil and gas drilling and
production services provider in the MENA region, offering onshore
and offshore contract drilling as well as workover and production
service. ADES International currently operates in the Kingdom of
Saudi Arabia, Kuwait, Egypt and Algeria, and has a total workforce
of approximately 3,300 employees. Since the establishment of the
business of ADES International in 2002, the ADES International
Group has grown to become Egypt's largest offshore drilling
operator by number of jack-up offshore drilling rigs, with a
growing presence in the Kingdom of Saudi Arabia and Algeria. While
maintaining a superior health, safety and environmental record, the
Group currently has a fleet of 36 onshore drilling rigs, 13 jack-up
offshore drilling rigs, a jack-up barge, and a mobile offshore
production unit, which includes a floating storage and offloading
unit. ADES International reported a 132 per cent. year-on-year
increase in revenue for the year ending 31 December 2019, with
revenue totalling US$477.8 million.
10. Interests in ADES Shares
As at the date of this announcement:
(a) 26,349,242 ADES Shares are held by ADES Investments,
representing approximately 63.9 per cent. of ADES International's
existing issued share capital (excluding Treasury Shares); and
(b) 2,033,848 ADES Shares are held by Zamil Investments,
representing approximately 4.9 per cent. of ADES International's
existing issued share capital (excluding Treasury Shares).
As at the date of this announcement, Innovative Energy and the
Public Investment Fund do not hold any ADES Shares.
11. Treasury Shares
Subject to the passing of the Disapplication Resolution, ADES
International has undertaken in the Implementation Agreement to
accept the Offer in respect of the Treasury Shares in accordance
with the procedure for acceptance to be set out in the Offer
Document as soon as reasonably practicable and in any event by no
later than two Business Days after the passing of the
Disapplication Resolution. A notice of general meeting, setting out
the Disapplication Resolution, is expected to be published by ADES
International on or before the date falling 10 days from the date
on which the Offer Document is published. As at the date of this
announcement, ADES International holds 2,544,382 ADES Shares as
Treasury Shares, representing approximately 5.8 per cent. of the
fully diluted share capital of ADES International (including the
Treasury Shares).
12. Current trading and outlook
ADES International expects to announce its year end results for
the financial year ended 31 December 2020 ( "FY 2020" ) on or
around the last week of March 2021. These results are expected to
confirm that, during FY 2020, the group has continued to trade in
line with its guidance for the year, with broadly flat performance
on a year-on-year basis and no material change to net debt as at 31
December 2020 compared to 30 September 2020.
13. Squeeze out, delisting, cancellation of trading and re-registration
Pursuant to the Implementation Agreement, ADES International has
agreed that, if the Offer becomes, or is declared, unconditional in
all respects, it will make an application to the FCA for the
cancellation of the listing of the ADES Shares from the Standard
Segment of the Official List and to the London Stock Exchange for
the cancellation of the admission to trading of the ADES Shares on
the London Stock Exchange's Main Market. It is anticipated that the
cancellation of the listing on the Standard Segment of the Official
List and the admission to trading on the London Stock Exchange's
Main Market will take effect no earlier than 20 Business Days after
the date on which the Offer becomes, or is declared, unconditional
in all respects.
Following the Offer becoming, or being declared, unconditional
in all respects and the ADES Shares having been delisted,
Innovative Energy intends to procure that ADES International be
re-registered as a DIFC private limited company.
The delisting of the ADES Shares and the re-registration of ADES
International as a private limited company will significantly
reduce the liquidity and marketability of any ADES Shares in
respect of which the Offer has not been accepted at that time and
their value may be affected as a consequence. Any remaining ADES
Shareholders will, in this case, become minority shareholders in a
majority controlled private limited company and may therefore be
unable to sell their ADES Shares. There can be no certainty that
ADES International will pay any further dividends or other
distributions in this case, or that such minority ADES Shareholders
will again be offered an opportunity to sell their ADES Shares on
terms which are equivalent to or no less advantageous than those
under the Offer.
If Innovative Energy, by virtue of acceptances of the Offer,
acquires or contracts to acquire not less than nine-tenths ((9)
/(10) ) in value of the ADES Shares to which the Offer relates and
the Offer becomes, or is declared, unconditional in all respects,
Innovative Energy intends to exercise its rights pursuant to
Article 98 of the DIFC Companies Law to acquire compulsorily the
remaining ADES Shares in respect of which it has not received
acceptances of the Offer on the same terms as the Offer (the
"Compulsory Acquisition"). The acceptance condition to the Offer
may be satisfied or waived in circumstances in which the threshold
for commencing the Compulsory Acquisition procedure has not yet
been reached.
The Offer will become, or be declared, unconditional in all
respects only if the conditions to the Offer have been satisfied
or, where applicable, waived. Subject to the satisfaction or, where
applicable, waiver of the conditions, it is expected that
completion of the Offer will occur during Q2 2021.
14. Implementation Agreement
In connection with the Offer, Innovative Energy and ADES
International have entered into an implementation agreement dated 8
March 2021 (the "Implementation Agreement" ) to record their
respective obligations relating to steps that they have each agreed
to take to implement the Offer. The Implementation Agreement
contains undertakings from the parties in connection with the
Offer, including, inter alia, (a) undertakings from both ADES
International and Innovative Energy to use all reasonable
endeavours to prepare the documents required to implement the
Offer, and (b) an undertaking from ADES International to apply to
(i) the FCA for the cancellation of the listing of the ADES Shares
from the Standard Segment of the Official List, and (ii) the London
Stock Exchange for the cancellation of the admission to trading of
the ADES Shares on the London Stock Exchange's Main Market, in each
case subject to the Offer becoming, or being declared,
unconditional in all respects. The Implementation Agreement also
governs the conduct of the parties pending completion of the
Offer.
15. Waivers under the Relationship Agreement
In connection with the Offer, ADES Investments and ADES
International have entered into a deed of waiver dated 8 March 2021
(the "Deed of Waiver"). Under the Deed of Waiver, ADES
International has unconditionally and irrevocably agreed to waive
the requirements of the following obligations of ADES Investments
and its associates under the Relationship Agreement in connection
with the Offer:
-- the obligation of ADES Investments under the Relationship
Agreement not to take any action that would have the effect of
preventing ADES International from complying with its obligations
under the Listing Rules which arises from a delisting of the ADES
Shares following the Offer becoming, or being declared,
unconditional in all respects; and
-- the obligations of ADES Investments under the Relationship
Agreement to abstain from voting on the Disapplication
Resolution.
Under the Deed of Waiver, the waivers described above shall
cease to have effect if the Offer lapses or is otherwise
withdrawn.
In accordance with accepted good practice, the Relationship
Agreement was entered into when ADES International listed in 2017
in order to ensure that the company would be run for the benefit of
shareholders as a whole following admission and that the ADES
Shares remain appropriate for a Main Market listing on an ongoing
basis and for so long as ADES International has a controlling
shareholder. The Independent Directors consider that it is
appropriate to approve the Deed of Waiver in order to procure an
offer on terms that the Independent Directors can recommend to ADES
Shareholders as a whole (for the reasons set out in paragraph 6
above).
Accordingly, the Independent Directors have approved ADES
International waiving these obligations (or any breach thereof)
under the Relationship Agreement in order to permit the Offer to be
made and implemented in accordance with its terms.
16. Related party transaction
The undertaking by ADES International contained within the
Implementation Agreement, subject to the passing of the
Disapplication Resolution, to accept the Offer in respect of the
Treasury Shares will constitute a related party transaction
pursuant to the Disclosure Guidance and Transparency Rules as
Innovative Energy will initially be a wholly owned subsidiary of
ADES Investments (a substantial shareholder of ADES International).
The Independent Directors consider the terms of the undertaking to
be fair and reasonable insofar as ADES International and its
independent shareholders are concerned.
17. Consents
EFG Hermes and Moelis & Company have each given and not
withdrawn their consent to the publication of this announcement
with the inclusion herein of the references to their names in the
form and context in which they appear.
18. Website
A copy of this announcement will be available, subject to
certain restrictions relating to persons resident in Restricted
Jurisdictions, on ADES International's website at
http://investors.adihgroup.com/ as soon as practicable following
the date of this announcement. For the avoidance of doubt, the
content of the website is not incorporated into and does not form
part of this announcement.
19. General
The Offer will be subject to the full terms and conditions to be
set out in the Offer Document and, in respect of ADES Shares held
in certificated form, the Form of Acceptance when issued, which
will include, inter alia, details of the circumstances in which the
conditions to the Offer will be satisfied or may be waived. The
conditions to the Offer shall be the following:
-- Innovative Energy receiving valid acceptances in respect of
not less than 8,768,741 ADES Shares (or such lesser number of ADES
Shares as Innovative Energy may decide), which represent not less
than approximately 56.9 per cent. of the existing share capital of
ADES International, including the Treasury Shares but excluding
those ADES Shares which, as at the date of this announcement, are
held by ADES Investments and Zamil Investments;
-- the Disapplication Resolution being duly passed by the
requisite number of ADES Shareholders at a general meeting of ADES
International; and
-- any antitrust clearance required having been received, or the
relevant waiting period having expired, in each case under the
merger control regime in the Kingdom of Saudi Arabia with respect
to the Offer.
The formal Offer Document and, in respect of ADES Shares held in
certificated form, the Form of Acceptance will be sent to ADES
Shareholders in due course. In deciding whether or not to accept
the Offer in respect of their ADES Shares to the Offer, ADES
Shareholders should consider the information contained in, and the
procedures described in, such documentation.
The bases and sources of certain information contained in this
announcement are set out in Appendix 1. Certain terms used in this
announcement are defined in Appendix 2.
Save in respect of any Compulsory Acquisition (which shall be
governed the DIFC Companies Law), the Offer will be governed by
English law and will be subject to the exclusive jurisdiction of
the English courts.
This announcement does not constitute an offer or an invitation
to purchase or subscribe for any securities.
The availability of the Offer to ADES Shareholders may be
affected by the laws of the local jurisdictions in which they
reside. Each ADES Shareholder should inform themselves about and
observe any applicable requirements.
The Offer will not be communicated, directly or indirectly, in
or into or by the use of the mails of, or any means or
instrumentality (including, but not limited to, by mail,
telephonically or electronically by way of internet or otherwise)
of interstate or foreign commerce of, or of any facilities of a
national, state or other securities exchange of, the United States
or any area subject to its jurisdiction or any political division
thereof, nor is it being communicated into any other Restricted
Jurisdiction, and the Offer will not be capable of acceptance by
any such use, means, instrumentality or otherwise from within the
United States or any other Restricted Jurisdiction. Accordingly,
copies of this announcement are not being, and must not be,
directly or indirectly, mailed or otherwise distributed or sent in,
into or from the United States or any other Restricted
Jurisdiction. Accordingly, persons receiving this announcement
(including, without limitation, custodians, nominees and trustees)
must not, directly or indirectly, distribute, mail or send it in,
into or from the United States or any other Restricted
Jurisdiction, and so doing may render any purported acceptance of
the Offer invalid.
Enquiries:
ADES International Tel: +202 385 25354 (Ext.
350)
Hussein Badawy
Innovative Energy Tel: +202 385 25354 (Ext.
400)
Legal Department
EFG Hermes (financial adviser Tel: +9714 363 4023
to ADES Investments and Innovative
Energy )
Mohamed Fahmi
Mohamed Abou Samra
Nour Fahmy
Moelis & Company (financial Tel: +971 4 304 5000
adviser to the Public Investment
Fund)
Rami Touma
Liam Beere
Wouter Leemhuis
Amit Kumar
Andrew Coates
Investec Bank plc (joint corporate Tel: +44 (0)207 597 5712
broker to ADES International)
Chris Sim
Canaccord Genuity Limited (joint Tel: +44 (0)207 523 8000
corporate broker to ADES International)
Henry Fitzgerald-O'Connor
James Asensio
ADES International LEI Number: 213800WADXE5U3ZY1K46
Important Notice
This announcement is for information purposes only and is not
intended to and does not constitute, or form part of, an offer,
invitation or the solicitation of an offer to purchase, otherwise
acquire, subscribe for, sell or otherwise dispose of any
securities, or the solicitation of any vote or approval in any
jurisdiction, pursuant to the Offer or otherwise, nor shall there
be any sale, issuance or transfer of securities of ADES
International in any jurisdiction in contravention of applicable
law.
The Offer will be made solely by means of the Offer Document
and, in respect of ADES Shares held in certificated form, the Form
of Acceptance accompanying the Offer Document, which will contain
the full terms and conditions of the Offer including details of how
to accept the Offer. Any approval, acceptance, decision or other
response to the Offer should be made only on the basis of the
information in the Offer Document and, in respect of ADES Shares
held in certificated form, the Form of Acceptance. ADES
Shareholders are strongly advised to read the formal documentation
in relation to the Offer once it has been despatched.
EFG Hermes, which is authorised regulated by the Dubai Financial
Services Authority in the Dubai International Financial Centre, is
acting as financial adviser exclusively for ADES Investments and
Innovative Energy and no one else in connection with the matters
set out in this announcement and will not regard any other person
as its client in relation to the matters set out in this
announcement and will not be responsible to anyone other than ADES
Investments and Innovative Energy for providing the protections
afforded to clients of EFG Hermes or its affiliates, nor for
providing advice in relation to the contents of this announcement
or any other matter referred to herein. Neither EFG Hermes nor any
of its subsidiaries, branches or affiliates owes or accepts any
duty, liability or responsibility whatsoever (whether direct or
indirect, whether in contract, in tort, under statute or otherwise)
to any person who is not a client of EFG Hermes in connection with
this announcement, any statement contained herein or otherwise.
Moelis & Company, which is authorised and regulated by the
FCA in the United Kingdom, is acting as financial adviser
exclusively for the Public Investment Fund and no one else in
connection with the matters set out in this announcement and will
not regard any other person as its client in relation to the
matters set out in this announcement and will not be responsible to
anyone other than the Public Investment Fund for providing the
protections afforded to clients of Moelis & Company, nor for
providing advice in relation to the contents of this announcement
or any other matter referred to herein. Neither Moelis &
Company nor any of its subsidiaries, branches or affiliates owes or
accepts any duty, liability or responsibility whatsoever (whether
direct or indirect, whether in contract, in tort, under statute or
otherwise) to any person who is not a client of Moelis &
Company in connection with this announcement, any statement
contained herein or otherwise.
Investec, which is authorised in the United Kingdom by the
Prudential Regulation Authority ("PRA") and regulated by the FCA
and the PRA, and Canaccord, which is authorised and regulated in
the United Kingdom by the FCA, are acting as joint corporate
brokers for ADES International and no one else and will not regard
any other person as their client in relation to the matters set out
in this announcement and will not be responsible to anyone other
than ADES International for providing the protections afforded to
their respective clients. Neither Investec, Canaccord nor any of
their respective subsidiaries, branches or affiliates owe or accept
any duty, liability or responsibility whatsoever (whether direct or
indirect, whether in contract, in tort, under statute or otherwise)
to any person in connection with this announcement, any statement
contained herein or otherwise.
Overseas Shareholders
This announcement has been prepared in accordance with English
law and the information disclosed may not be the same as that which
would have been prepared in accordance with the laws of
jurisdictions outside England. The statements contained in this
announcement are made as at the date of this announcement, unless
some other time is specified in relation to them, and there shall
be no implication that there has been no change in the facts set
forth in this announcement since such date.
The release, publication or distribution of this announcement
and the availability of the Offer in or into jurisdictions other
than the United Kingdom may be affected by the laws and regulations
of those jurisdictions. Persons who are not resident in the United
Kingdom, or who are subject to the laws of any jurisdiction other
than the United Kingdom, should inform themselves about, and
observe any applicable requirements. Any person (including, without
limitation, nominees, trustees and custodians) who would, or
otherwise intends to, forward this announcement, the Offer Document
or any accompanying document to any jurisdiction outside the United
Kingdom should refrain from doing so and seek appropriate
professional advice before taking any action. Any failure to comply
with the applicable legal or regulatory requirements may constitute
a violation of the laws and/or regulations of any such
jurisdiction. To the fullest extent permitted by applicable law,
the companies and persons involved in the Offer disclaim any
responsibility and liability for the violation of such restrictions
by any person. Further details in relation to Overseas Shareholders
will be contained in the Offer Document.
Unless otherwise determined by Innovative Energy, and permitted
by applicable law and regulation, the Offer will not be made,
directly or indirectly, in or into or by use of the mails or any
other means or instrumentality (including, without limitation,
telephonic or electronic) of interstate or foreign commerce of, or
any facility of a national, state or other securities exchange of,
a Restricted Jurisdiction, and no person may accept the Offer by
any such use, means, instrumentality or facility or from within a
Restricted Jurisdiction. Accordingly, copies of this announcement
and the formal documentation relating to the Offer are not being,
and must not be, directly or indirectly, mailed or otherwise
forwarded or distributed in, into or from a Restricted Jurisdiction
and persons receiving this announcement (including custodians,
nominees and trustees) must not distribute or send it into or from
a Restricted Jurisdiction.
In accordance with normal United Kingdom market practice and
subject to applicable regulatory requirements, including Rule 14e-5
under the US Securities and Exchange Act of 1934, Innovative Energy
or its nominees or brokers (acting as agents) may from time to time
whilst the Offer remains open for acceptance make certain purchases
of, or arrangements to purchase, ADES Shares otherwise than under
the Offer, such as in the open market or through privately
negotiated purchases. Such purchases, or arrangements to purchase,
shall comply with applicable rules in the United Kingdom and the
rules of the London Stock Exchange. Details about any such
purchases will be available from any Regulatory Information
Service.
Cautionary note regarding forward looking statements
This announcement contains certain statements which are, or may
be deemed to be, "forward-looking statements" which are prospective
in nature. The words "believe", "anticipate", "expect", "intend",
"aim", "plan", "predict", "continue", "assume", "positioned",
"may", "will", "should", "shall", "risk" and other similar
expressions that are predictions of or indicate future events and
future trends identify forward-looking statements. These
forward-looking statements include all matters that are not current
or historical facts. By their nature, forward-looking statements
involve risks and uncertainties because such statements relate to
events and depend on circumstances that may or may not occur in the
future. Forward-looking statements are not indicative of future
performance and Innovative Energy's or ADES International's actual
results of operations, financial condition and liquidity, and the
development of the industry in which Innovative Energy or ADES
International sources operates, may differ materially from those
made in or suggested by the forward-looking statements contained in
this announcement. The cautionary statements set out above should
be considered in connection with any subsequent written or oral
forward-looking statements that Innovative Energy, or persons
acting on its behalf, may issue.
No profit forecasts or estimates
Nothing in this announcement is intended or shall be deemed to
be a forecast, projection or estimate of the future financial
performance of Innovative Energy or ADES International and no
statement in this announcement should be interpreted to mean that
earnings or earnings per share of Innovative Energy or ADES
International (where relevant) for the current or future financial
years would necessarily match or exceed the historical published
earnings or earnings per share for Innovative Energy or ADES
International, as appropriate.
Publication on website
A copy of this announcement will be available, subject to
certain restrictions relating to persons resident in Restricted
Jurisdictions, on ADES International's website at
http://investors.adihgroup.com/ as soon as practicable following
the date of this announcement. For the avoidance of doubt, the
content of the website is not incorporated into and does not form
part of this announcement.
appendix 1
SOURCES AND BASES OF INFORMATION
Unless otherwise stated in this announcement:
1. references to the existing issued share capital of ADES
International are to the number of ADES Shares in issue as at 5
March 2021, being the last Business Day prior to the date of this
announcement, which was 41,249,500 ADES Shares. This figure
excludes the Treasury Shares. The ISIN for the ADES Shares is
AEDFXA1EN018;
2. all prices for ADES Shares have been derived from the Daily
Official List and represent Closing Prices on the relevant
date(s);
3. references to the VWAP per ADES Shares for the 30 day, 90 day
and 12 month periods ended 5 March 2021 are derived from data
provided by Bloomberg; and
4. certain figures included in this announcement have been
subject to rounding adjustments.
appendix 2
DEFINITIONS
"ADES Directors" the board of directors of ADES International
"ADES International" ADES International Holding plc, a company
limited by shares under the Companies Law
- DIFC Law No. 2 of 2009 and registered
in the Dubai International Financial Centre,
with registered number 2175
"ADES International ADES International and its subsidiaries
Group" and subsidiary undertakings
"ADES Investments" ADES Investments Holding Ltd, a company
limited by shares under the Companies Law
- DIFC Law No. 2 of 2009 and registered
in the Dubai International Financial Centre,
with registered number 2226
"ADES Shareholders" holders of ADES Shares whether such shares
are held in certificated form or in uncertificated
form as Depositary Interests, as the context
so requires, which shall include ADES International
in its capacity as the holder of the Treasury
Shares
"ADES Shares" the existing unconditionally allotted or
issued and fully paid ordinary shares of
US$1.00 each in the capital of ADES International
and any further shares which are unconditionally
allotted or issued before the date on which
the Offer closes (or such earlier date or
dates, not being earlier than the date on
which the Offer becomes, or is declared,
unconditional as to acceptances or, if later,
the Closing Date of the Offer, as Innovative
Energy may decide) including (as the context
requires) the Treasury Shares and the Depositary
Interests in respect of such shares
"Innovative Energy" Innovative Energy Holding Ltd, a company
limited by shares under the Companies Law
- DIFC Law No. 2 of 2009 and registered
in the Dubai International Financial Centre,
with registered number 4509
"Business Day" any day, other than a public holiday, Saturday
or Sunday, when banks generally are open
in London for general banking business
"Canaccord" Canaccord Genuity Limited
"Closing Date" the closing date of the Offer to be set
out in the Offer Document
"Closing Price" the closing middle market price of an ADES
Share as derived from the Daily Official
List on any particular date
"Compulsory Acquisition" where Innovative Energy has, by virtue of
acceptances of the offer, acquired or contracted
to acquire not less than nine-tenths ((9)
/(10) ) in value of the Shares to which
the Offer relates, the compulsory acquisition
by Innovative Energy (on the same terms
as the Offer), pursuant to Articles 97 to
104 of the DIFC Companies Law, of the remaining
ADES Shares in respect of which it has not
received acceptances of the Offer
"CREST" the system for paperless settlement of trades
in securities operated by Euroclear in accordance
with CREST Regulations
"CREST Regulations" the Uncertificated Securities Regulations
2001 (SI2001 No. 3755)
"Daily Official List" the Daily Official List of the London Stock
Exchange
"Deed of Waiver" the deed of consent and waiver dated 8 March
2021 between ADES International and ADES
Investments in relation to the Relationship
Agreement
"Depositary" Link Market Services Trustees Limited
"Depositary Interests" independent securities constituted under
or "DIs" English law and issued, or to be issued,
by the Depositary in respect of, and representing
on a one-for-one basis, underlying ADES
Shares which may be held or transferred
through the CREST system
"DIFC" the Dubai International Financial Centre
"DIFC Companies Law" the Dubai International Financial Centre
Companies Law No. 5 of 2018
"DI Holders" the holders of Depositary Interests
"Disapplication Resolution" the resolution to be set out in the notice
of extraordinary general meeting (which
is expected to be published by ADES International
on or before the date falling 10 days from
the date on which the Offer Document is
published) to approve the disapplication
of pre-emption rights in respect of the
sale of the Treasury Shares for cash by
ADES International pursuant to the Offer
"Disclosure Guidance the disclosure guidance and transparency
and Transparency Rules" rules of the FCA made under Part VI of FSMA
"EFG Hermes" EFG Hermes UAE Limited
"Euroclear" Euroclear UK & Ireland Limited, the operator
of CREST
"FCA" the Financial Conduct Authority
"Form of Acceptance" the Form of Acceptance, Authority and Election
for use by ADES Shareholders who hold their
ADES Shares in certificated form in connection
with the Offer
"FSMA" the UK Financial Services and Markets Act
2000 (as modified, amended or re-enacted
from time to time)
"FY 2020" the financial year of ADES International
ended 31 December 2020
"Independent Directors" the following independent non-executive
directors of ADES International: Hatem Soliman,
Mohamed Walid Cherif, Nabil Kassem and Yasser
Hashem
"Investec" Investec Bank plc
"ISIN" the International Securities Identification
Number
"Listing Rules" the listing rules of the FCA made under
Part VI of FSMA
"London Stock Exchange" the London Stock Exchange plc or its successor
"Main Market" the main market for listed securities of
the London Stock Exchange
" MENA" Middle East and North Africa
"Moelis & Company" Moelis & Company UK LLP
"Offer" the recommended offer made by Innovative
Energy to acquire all the ADES Shares not
already owned or treated as owned by Innovative
Energy and its associates for the purposes
of the DIFC Companies Law on the terms and
subject to the conditions to be set out
in the Offer Document and, in respect of
ADES Shares held in certificated form, the
Form of Acceptance including, where the
context so requires, any subsequent revision,
variation, extension or renewal of such
offer and includes any election available
in connection with it
"Offer Document" the document containing and setting out
the terms and conditions of the Offer
"Offer Price" US$12.50 per share in cash for each ADES
Share
"Official List" the Official List of the FCA
"Overseas Shareholders" ADES Shareholders or DI Holders who are
resident in, ordinarily resident in, or
citizens of, jurisdictions outside the United
Kingdom
"PRA" the Prudential Regulation Authority
"Public Investment the Public Investment Fund, a government
Fund" fund established in 1391H and regulated
by the Law of the Public Investment Fund
issued pursuant to Royal Decree No. M/92
dated 12/08/1440H, having its registered
office at Alra'idah Digital City, Building
MU04, Al Nakhil District, P.O. Box 6847,
Riyadh 11452, The Kingdom of Saudi Arabia
"Relationship Agreement" the relationship agreement between ADES
International and ADES Investments dated
8 May 2017
"Restricted Jurisdiction" any jurisdiction where local laws or regulations
may result in a significant risk of civil,
regulatory or criminal exposure if information
concerning the Offer is sent or made available
to ADES Shareholders in that jurisdiction
"Treasury Shares" ADES Shares held or which become held in
treasury at any time prior to the date on
which the Offer completes and becomes effective
"UK" or "United Kingdom" the United Kingdom of Great Britain and
Northern Ireland
"uncertificated" or a share or other security title to which
"in uncertificated is recorded in the relevant register of
form" the share or security as being held in uncertificated
form, in CREST (through Depositary Interests),
and title to which, by virtue of the CREST
Regulations, may be transferred by means
of CREST
"US" or "United States" the United States of America, its territories
and possessions, any state of the United
States and the District of Columbia
"US$" or "US dollars" the lawful currency of the United States
"VWAP" volume-weighted average price
"Zamil Investments" Zamil Group Investment Co., a company incorporated
in and under the laws of Saudi Arabia with
CR No. 2051041904 and whose registered address
is P.O Box 9 Khobar 31952, Saudi Arabia
All times referred to are London time unless otherwise
stated.
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END
OFBDKFBQNBKKQNK
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