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Unicorn Investment Bank

DRAFT. Unicorn Investment Bank. MADARAAT Restructuring – Phase I Action Plan Update Presentation to Sheikh Yousef. 23 May 2010. Key objectives of the proposed Group restructuring.

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Unicorn Investment Bank

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  1. DRAFT Unicorn Investment Bank MADARAAT Restructuring – Phase I Action Plan Update Presentation to Sheikh Yousef 23 May 2010

  2. Key objectives of the proposed Group restructuring Build a privately owned investment group with a clear focus on the real estate value chain, incorporating high social standards Objectives Benefits Allow each shareholder of the Group’s companies to privately enhance the value of their portfolio Enables eachshareholder to preserve their privacy and simultaneously leverage/monetize their shareholding Private Private Flexible Simple Reconfigure the consolidation of various assets and investments to enhance the funding capabilities of the Group and its shareholders Enables the Group and its shareholders to access additional funding and optimizes the cost of funding Efficient Flexible Reorganize the current shareholding structure to achieve a higher degree of simplicity and efficiency Enhances the attractiveness of the Group’s profile and its investment portfolio Simple

  3. Restructuring execution - a two-phased approach Phase 1 1 to 3 months timeframe Phase 2 [TBA] timeframe Restructuring of non-regulated entities and entities with limited/moderate regulation requirements Restructuring of regulated entities • Madaraat • Agtab Al-Binaa • Al-Irtifag Trading • Al Arkan Construction Co. • Afwaf Investment Co. • Eamar Al-Bayader • Manazel Company • Daaem Al-Khaleej • Inmaa Al-Madaen • Mamlakat Al-Takseet • Alalamiah Contracting Co. • Namaa Al-Sahraa • Al-Khalijiah Co. • Al-Burag Marketing • Thimar Al-Arabiya • Kingdom Installment Co • Saudi Home Loans • Unicorn Investment Bank • Unicorn Capital Saudi Arabia • Tazur Private Flexible Simple Efficient • Dar Al-Arkan Dar will be subject to progressive restructuring in the two phases

  4. Taking the Group from an existing complex structure…

  5. …to a more simple structure (phase I) Private Flexible Simple Efficient MADARAAT Parent Agtab Al-Binaa Al-Irtifag Trading SPVs 26 SPVs Subs Daem shares/ assets AlBurag Shares/ assets Dar Shares/ assets Eamar shares/ assets Namaa Shares/ assets AlArkan shares/ assets Inmaa Shares/ assets Companies & Assets Afwaf shares/ assets Mamlakat Shares/ assets Manazel Shares/ assets KIC shares/ assets Alalamiah Shares/ assets AlKhalijia Shares/ assets Thimar Shares/ assets Some of these companies may be dissolved / merged in the restructuring

  6. Phase I Restructuring execution – tentative timeline Private Flexible Simple Efficient

  7. Phase I Restructuring execution – tentative timeline (cont.) Private Flexible Simple Efficient

  8. Phase I Restructuring execution – timeline considerations • The expected timeframe to complete phase 1 of Madaraat restructuring is three months, subject to the following: • All documents and information are received in the scheduled time • No delays arising from the following: • Government / Authorities procedures (for amendment of MoA, AoA, Bylaws, for dissolution, etc.) • Unexpected clearance issues arising from Zakat review • Regulatory restrictions (if any) • Statutory or contractual restrictions and clauses (e.g. covenants, share transfer restrictions, shares pledged, etc.) Private Flexible Simple Efficient

  9. Action plan - a detailed and thorough review of documents A three-steps review procedure will be applied in this phase to assess and identify potential issues that may challenge the restructuring Legal review Private Final view of companies and assets Identified issues will be addressed and resolved on time Flexible Financial review Simple Efficient Zakat review

  10. Action plan - an efficient and proactive valuation Valuation of each company and/or underlying assets on a standalone basis will provide the basis of the exchange ratio to be used in the restructuring of the Group’s portfolio Companies / assets valuation Shareholders original individual net worth will be preserved in the new structure Private Valuation of shareholders interests (direct and indirect) Flexible Simple Efficient Identification of assets and shares that will be transferred Calculation of the exchange ratios

  11. Action plan - a three-way effective transfer approach A three-way approach will be followed in this phase to transfer the assets and / or shares among shareholders and companies Transfer of assets Private New Group Structure Transfer of shares Flexible Simple Efficient Combination of shares and asset transfers Where possible, shares will be transferred from the underlying companies to the Holding company. In some cases, underlying assets will be transferred

  12. Proposed valuation methodology – illustrative example The following is a basic indicative example of how interests of shareholders will be transferred to the holding company and preserved A (10%) B (40%) C (50%) A (15%) B (20%) C (20%) D (45%) Shareholders Private Company X Company Y Flexible Simple Value 100 Value 150 Efficient Each shareholder’s total net worth in the Group

  13. Proposed valuation methodology – illustrative example (cont.) A (13%) B (28%) C (32%) D (27%) Shareholders Madaraat Y Value 250 Private Flexible Simple Efficient Company X Company Y Shareholders own now the Holding company and their original individual net worth has been preserved

  14. Final assessment and capital structure review A three-way approach will be followed in this phase to transfer the assets and / or shares among shareholders and companies Final structure review Balance sheet review Next step Phase 2 The new Group structure will be assessed and discussed with shareholders The consolidated balance sheet of the new Holding company will be reviewed, including the new capital structure Private Flexible Simple Efficient At the end of the three-months timeline, the phase 2 of the Madaraat Group restructuring will be initiated

  15. Immediate Next Steps • Collecting full set of documents and information (legal and financial) • Conduct thorough legal and financial reviews of each company • Appoint tax advisors and work closely with them to undertake detailed Zakat review and analysis to identify any potential issue that may affect the restructuring process • Unicorn to undertake an immediate valuation of the Group’s companies and assets, as well as each shareholder net worth in the Group, in order to agree exchange ratios for share transfers

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