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Makkah Construction and Development Company (MCDC ) is acquiring a 30% stake in Riyadh-based developer First Avenue Real Estate Development for SAR 341 mn after signing a share purchase agreement, according to a filing to the exchange. MCDC is financing the acquisition through its own resources and existing facilities.
The rationale: MCDC undertook the acquisition as part of a move to expand into high-value projects and develop its strategic relationships.
The caveat: The agreement includes a commitment from First Avenue to fulfill the requirements and acquire the necessary approvals that would allow the company to debut on Nomu. First Avenue lined up regulatory approval from the Capital Market Authority in June. The IPO — which will see First Avenue take an 8% stake to Tadawul’s parallel market through issuing new shares — would bring MCDC’s holding in the company down to 27.7%, the filing said.
