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Al Safat Investment Company

Presentation report for investors

May 2023

Merger Overview

  • On June 1, 2022, Al-Safat Investment Company K.S.C.P., a publicly listed company on Boursa Kuwait, announced that it had reached a preliminary agreement to merge by amalgamation with Cap Corp Investment Company K.S.C.C., an unlisted company. Upon the completion of the merger process, Cap Corp Investment Company K.S.C.C. will be dissolved, while the shares of Al-Safat Investment Company K.S.C.P. will continue trading.
  • The merger between Al-Safat Investment Company K.S.C.P. and Cap Corp Investment Company K.S.C.C. is subject to a comprehensive process in accordance with Kuwaiti laws and regulations. This process encompasses various steps, such as conducting due diligence, obtaining an independent assets valuator report, obtaining an independent investment advisor report, as well as securing the necessary regulatory approval and stakeholder approvals through an extraordinary general meeting for both parties.
  • Based on the independent asset valuator report, the indicative swap ratio for each (1) share of Cap Corp Investment Company will be half (0.5) that of Al-Safat Investment Company share.
  • Al-Safat Investment Company, shall increase its capital by issuing 100,000,000 shares to be allocated to Cap Corp Investment Company’s shareholder. Al Safat Investment Company shareholders will waive their priority right to subscribe to the capital increase
  • The objective of the merger is to form a prominent investment company by expanding its market share and broadening its client base. The post merger entity will benefit from a balanced and diversified asset base, which includes cash generating investments that will create a more stable and reliable income stream in the future.

Companies Overview

Overview of Al-Safat Investment Company

Al-Safat Investment Company is a Sharia-compliant investment company listed on Boursa Kuwait. The company’s main focus is acquiring strategic investments in selective enterprises, industries and investment-vehicles seeking growth and capital appreciation in accordance with the provisions of Islamic Sharia. The company’s investments is diversified among financial, real estate and industrial sectors

Revenue contribution by segments as at December 31, 2022

Asset distribution based on operating segments as at December 31, 2022

Summary of the main financial statements as at December 31, 2022

Overview of Cap Corp Investment Company

Cap Corp Investment Company was established as a Kuwaiti shareholding company (closed) in 2008 following the principles of Islamic Sharia. Cap Corp’s current share capital is KWD 20mn . The company is principally engaged in Real Estate investments, asset management and private equity.

Distribution of investments by geographic region as of December 31, 2022

Distribution of investments by geographic region as of December 31, 2022

Distribution of investments by geographic region as of December 31, 2022

Valuation Summary

  • KPMG was appointed as an asset valuator to determine the merger swap ratio as of March 31, 2022. The asset valuator report was based on the audited financial statements of both companies for the years ending December 31, 2021 and 2020; The companies interim statements for the period ending March 31, 2022; publicly available information; and meetings and discussions with the management of the two companies.
  • Based on the independent asset valuator report, the indicative swap ratio for each (1) share of Cap Corp Investment Company will be half (0.5) that of Al-Safat Investment Company share.

Comparable Companies

Weighted Average Price

Al Safat Investment Company

Comparable Companies

Adjusted net asset value

Cap Corp Investment Company

Merger Objectives

The Board of Directors of Al-Safat Investment Company and Cap Corp Investment Company have concluded that the merger will yield a favorable outcome, serving the best interest of their respective  shareholders. The merger aims to achieve the following objectives:

  • Forming a prominent investment company in the Islamic financial services realm by expanding its market share which will ultimately result in a positive impact on it market value and deliver an enhanced value to its shareholders.
  • Upon the completion of the merger, it is anticipated that the shareholder equity will reach approximately KWD 37 million, leading to a notable 19% increase in the book value of the company.
  • Through this merger the company aims to expand its client base which shall increase revenue from fee and commission clients’ portfolios by approximately 20%.
  • The merging entity will benefit from a well-rounded and diversified portfolio of income-generating assets, including investments in financial, real estate development and information technology sectors. This creates a more stable and reliable income stream. The company's assets are expected to increase to approximately KD 51 million, representing a 39% increase. AUM is anticipated to reach approximate US$ 250mn
  • Al-Safat Investment Company will gain a valuable team of professionals with extensive expertise and specialized competencies, who are expected to play an effective role in achieving the company's goals and strategic direction for the future.

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