Jamjoom Pharma signs binding share subscription agreement in a special purpose vehicle to build and operate a pharmaceutical facility

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Jamjoom Pharmaceutical Factory Company - Jamjoom Pharma announced that negotiations regarding the non-binding term sheet signed with Pharmaceutical Investments Company - Liveera, owned by the Public Investment Fund, resulted in Liveera establishing a special purpose vehicle (referred to as Biologics) to build, own, and operate a facility for manufacturing and marketing vaccines, biological products, and biosimilars in Saudi Arabia.

In a statement on Tadawul, the company explained that yesterday, Wednesday, it signed a binding share subscription agreement with Biologics for the purpose of Jamjoom Pharma joining as a shareholder in a joint venture and subscribing to shares of Biologics, in addition to a shareholders' agreement with Liveera and Biologics regarding Biologics.

It stated that negotiations on the non-binding term sheet resulted in Liveera establishing Biologics, and that Jamjoom Pharma will subscribe to shares of Biologics, instead of directly establishing a joint venture company.

It said that under the provisions of the subscription agreement, Jamjoom Pharma and Biologics agreed on a number of procedures for Jamjoom Pharma's subscription in Biologics, whereby it will subscribe to 4,900 new shares with a nominal value of 100 riyals per share, with a total nominal subscription value of 490,000 riyals, and the ownership percentages in Biologics after completion will be 51% for Liveera and 49% for Jamjoom Pharma.

It clarified that the subscription agreement is subject to a set of customary approvals and preconditions, stressing that the completion of the proposed transaction is subject to fulfilling the conditions contained in the subscription agreement, and therefore signing the subscription agreement does not constitute a guarantee of completing the proposed transaction, noting that any material developments or updates will be announced in due course.

It added that the shareholders' agreement includes essential provisions, including customary governance provisions, in addition to provisions related to financing, including the shareholders' commitment to finance Biologics for 5 years according to the business plan upon its approval.

It noted that apart from the total nominal value of Jamjoom Pharma's subscription, the financial impact is expected to become clear at a later stage after the parties complete preparing Biologics' business plan.

The company explained that it and Liveera have obtained a no-objection certificate on economic concentration regarding the proposed transaction from the General Authority for Competition.

According to data available on Argaam, Jamjoom Pharma had signed in last October a non-binding term sheet with Pharmaceutical Investments Company (a single-shareholder closed joint stock company) owned by the Public Investment Fund, concerned with localizing and expanding the biological pharmaceutical sector in Saudi Arabia.

The memorandum includes establishing a joint venture in the field of developing, manufacturing, and marketing vaccines, biological products, and biosimilars within Saudi Arabia.

Details of the binding share subscription agreement between Jamjoom Pharma and Liveera

Item

Details

Counterparty

Pharmaceutical Investments Company - Liveera (owned by the Public Investment Fund)

Event

Signing of binding share subscription agreement and shareholders' agreement with Biologics

New Company

Biologics (a special purpose vehicle established by Liveera)

Company Objective

Build, own, and operate a facility for manufacturing and marketing vaccines, biological products, and biosimilars in Saudi Arabia

Deal Structure

Jamjoom Pharma's subscription in shares of Biologics instead of directly establishing a joint venture

Subscription Value

490,000 riyals (nominal value)

Number of Shares

4,900 new shares

Nominal Value per Share

100 riyals

Ownership Structure after Completion

Liveera 51% - Jamjoom Pharma 45%

Completion Conditions

Subject to customary approvals and preconditions, and signing the agreement does not constitute a guarantee of completing the transaction

Financing

Commitment of shareholders to finance Biologics for 5 years according to the business plan after its approval

Financial Impact

Currently limited to the nominal value of the subscription (490,000 riyals), while the financial impact will be determined later after the business plan is prepared

Regulatory Approvals

Both companies obtained a no-objection certificate on economic concentration from the General Authority for Competition

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