NADEC says MC2 assets transferred to Food Security Holding, ups stake to 14.87%

Logo of National Agricultural Development Co. (NADEC)

National Agricultural Development Co. (NADEC) announced that following the transfer of all assets of the Second Milling Co. (MC2) to the Food Security Holding Co., a limited liability firm, the two companies were merged under the name Second Milling Co. (MC2).

The company said in a statement on Tadawul that Abdulaziz Alajlan & Sons Co. for Commercial and Real Estate Investment purchased the entire share of Olam International Limited.

MC2 aimed at raising its operational capabilities by improving production, marketing and distribution efficiency and reducing expenses associated with service contracts. 

Accordingly, the partners agreed to terminate past service agreements, including the ones concluded with NADEC. The company will pay compensation of SAR 10 million for a distribution pact for retail products sold and delivered by MC2 exclusively to NADEC and a services agreement to provide marketing services.

Separately, NADEC increased its ownership in MC2 and signed a share purchase agreement (SPA) for 2.5 million shares, representing 4.87% of MC2’s capital, from Abdulaziz Alajlan’s stake after transferring Olam’s shares.  

Accordingly, MC2 is now 50.13% owned by Abdulaziz Alajlan & Sons, 35% by Al Rajhi International for Investment Co. and 14.87% by NADEC.

The statement indicated that the deal totaled SAR 40.29 million (calculated at the same value between Abdulaziz Alajlan and Olam International per share).  

The agreement included a number of terms and conditions that regulate the process of completing the SPA and terminating the distribution and services agreements.  

The financial impact of the share purchase will be reflected on Q4 2023’s financials, NADEC added.  

Sulaiman bin Abdulaziz Al-Rajhi Holding Co., and its representative on NADEC’s board of directors, Bader Al Sayari, are related parties. 

Any new announcements will be made in due course, the statement added.