Jazan Energy acquisition of Jazil Investment off after capital increase denied

Jazan Energy and Development Co. has terminated its agreement to acquire Jazil Investment Co. after Saudi Arabia’s Capital Markets Authority denied its request to increase its capital.

Jazan Energy had requested to increase its capital from SR500 million ($133 million) to SR828 million through the issue of new ordinary shares to the sellers of Jazil Investment, Jazan said in a filing to the Tadawul.

“The non-approval from the CMA is one of the conditions precedent for the transaction, and that failure to obtain it leads to the termination of the agreement,” Jazan said in the filing. “The company will review the next steps and announce any future material developments related to the transaction in a timely manner.”

Jazan remains “committed to its expansion plans”, it said.

The company last week announced a quadrupling of first-quarter net profit to SR2.1 million as sales increased led by a 10.3 percent jump in agriculture and aquaculture products.

Jazil was founded in 2004 as part of Family Investment Office Co. Its investments include Performance Minerals & Chemicals Factory, Taaqaat Technical Services Co., Axis Inspection and Al Jazeera Gypsum Factory.