Winner: Jadwa’s acquisition of 30% stake in Luberef ExxonMobil sold its 30% stake in Lubricating Oil Refining Company (Luberef), a joint venture with Saudi Aramco at the very end of 2007. The buyers were a consortium composed of affiliates of the Zamil Group, the Al Subeaei Group and Jadwa Proprietary Investments. Jadwa Investment advised the consortium.
What makes the transaction stand out are two things. First, that Jadwa becomes the first-ever Saudi joint venture partner of Saudi Aramco. Second, the winning bid also included what Jadwa Investment believes to have been the first special purpose vehicle ever created under Saudi law: the Jadwa Investment Industrial Company, formed by the three members of the consortium.
The acquisition of Luberef shares was funded partly in cash and partly through a debt transaction, all Islamic. The debt portion was completed through a murabaha loan from a Saudi commercial bank.
In order to expand participation in the investment beyond the initial three consortium members, Jadwa also created a co-investment fund for investors without the voting rights associated with owning Luberef shares. The structure of the fund is Islamic.
