Retal’s Ajdan takeover paves way for mixed-use real estate sector: CEO

Abdullah Albraikan, CEO of Retal Urban Development Co.

Abdullah Albraikan, CEO of Retal Urban Development Co., said that signing the share swap agreement with Al Fozan Holding Co. to acquire the latter’s entire stake in Ajdan Real Estate Development Co. represents an opportunity to strongly enter the mixed-use real estate sector.
 

In an exclusive interview with Argaam, the top executive explained that pursuing this path independently would have required significant investments in terms of time and resources. “This step opens new horizons for sustainable growth through the expected operational and financial integration between the two platforms,” he added.
 

He explained that the acquisition, which will be carried out through Retal’s capital increase, will strengthen the company’s financial position and expand its equity base, which will improve its leverage ratio.
 

“This will support the company’s future ability to obtain additional financing to implement its projects, in addition to leveraging the expected cash flows from real estate sales and dividend distributions,” Albraikan added.
 

Regarding the transaction procedures, he noted that all material conditions were subject to strict governance scrutiny, explaining that the board of directors reviewed an independent valuation report to ensure the fairness of the transaction and alignment of interests.
 

The CEO also expects that the deal will enable Retal to access a diversified portfolio that includes projects such as Ajdan Waterfront and Ajdan Al Ramis, in addition to under-execution projects, including the Fairmont Ajdan Al Khobar Hotel and the Infinity project.
 

Concerning the expected synergies between the two companies, Albraikan stated that Ajdan owns off-plan residential projects comprising more than 5,300 units currently under construction in cooperation with major developers.
 

He also explained that Retal plans to leverage its extensive expertise to enhance the execution capabilities of these projects, while benefiting from its relationships with contractors and suppliers to ensure efficient execution and cost optimization once the deal is completed.
 

According to data available with Argaam, Retal signed, on Feb. 14, a share swap agreement with Al Fozan Holding to acquire the latter’s entire stake in Ajdan Real Estate Development. Retal said it will acquire 14.25 million ordinary shares, representing 47.5% of Ajdan’s share capital, in exchange for the issuance of new ordinary shares to Al Fozan Holding.
 

Retal's capital will increase by 11% from SAR 500 million to SAR 555 million for the purpose of the transaction.
 

Retal also said it submitted offers to the other shareholders of Ajdan to acquire all their shares in Ajdan.
 

Accordingly, Retal has submitted offers to Abdulqadir Al Muhaidib & Sons Co. to acquire 14.25 million ordinary shares, representing 47.5% of Ajdan share capital, in exchange for the issuance of 55 million new ordinary shares of Retal. Retal further offered to acquire 1.5 million ordinary shares, representing 5.0% of Ajdan, from Sumou for International Investment Co., in exchange for 5.79 ordinary shares of Retal.