The Public Investment Fund (PIF), the sovereign wealth fund of Saudi Arabia, has signed a non-binding memorandum of understanding (MoU) with Jeddah-based Middle East Paper Company (MEPCO) to acquire a “significant” minority stake.
The PIF will subscribe to MEPCO’s newly issued shares at SAR 31.50 ($8.40) per share, subject to obtaining the Capital Market Authority (CMA) and other regulatory approvals, the company said in a regulatory filing on Tadawul, the Saudi Stock Exchange.
MEPCO said the initial pact with the PIF is “not binding” and will expire on 31 July, 2023, or “upon concluding a legally-binding subscription agreement between MEPCO and the PIF, whichever is earlier.”
An integrated paper manufacturer offering products for the packaging, construction, and furniture sectors, MEPCO has hired SNB Capital, while the PIF has authorized GIB Capital as advisers on the deal.
Among the largest sovereign wealth funds in the world, the PIF has a pivotal role in realizing Vision 2030, Saudi Arabia’s economic transformation programme. The PIF acquisition is in line with its strategy to diversify the kingdom’s oil dependent economy and boost investment in domestic companies.