Litigation & Public Affiars
Preem/Varo Energy Deal - Major Step In Strategic Re-orientation of Mohammed Al Amoudi Business Interests
In October 2023, it was announced that Mohammed Al Amoudi as beneficial owner of Preem had approved an investigation into various options for the future of the company in light of both the company’s needs and a proposed change in the strategic direction of Mohammed’s investments. Deutsche Bank pre-empted this investigation as it was being concluded by initiating an involuntary sale which, in the opinion of Mohammed, significantly reduced the ability to achieve full valuation for the asset.
However, this led to Deutsche Bank accepting an offer for Preem by Varo Energy. After appropriate due diligence and regulatory approvals, the proposed deal has now been closed. Despite the regrettable circumstances of the sale, it satisfies his concern to ensure the continuation of past commitments to the European Green Transition and to the broader strategic interests of Sweden.
At the time of his initial announcement, Mohammed said that the investigation had arisen from a “commitment to remove the debt burden on my businesses and ensure a smoother succession process in the future”. Both those strategic aims remain in force. Mohammed will now turn his main focus towards his home markets in Saudi Arabia and Ethiopia although still maintaining his interest in green energy and other high technology industries. The process of dealing with all outstanding matters related directly or indirectly to the divestment of Preem and the debt reduction is expected to take about 12-18 months from the completion of the Preem/Varo deal.
Mohammed Al Amoudi Explores Options for Swedish Energy Business
Mohammed Al Amoudi, beneficial owner of Preem, one of Sweden’s most significant energy businesses, has approved an investigation to be undertaken by financial advisers commissioned through Preem’s holding company, Corral Petroleum Holdings [“CPH”], into various options to take the company forward and meet Mr Al Amoudi’s broader strategic requirements.
Mr Al Amoudi said, “This is the culmination of months of careful strategic review. The global economic situation has changed considerably since the COVID epidemic emerged in 2019. In this context, I am open to all options recommended by advisers and senior management not excluding a full sale of Preem although this has not yet been decided. The key drivers for this process are a commitment to remove the debt burden on my businesses and ensure a smoother succession process in the future. In addition, I have instructed the advisers through CPH to make every effort to ensure that my commitment to the Green Transition is upheld and to take full account of the strategic interests of Sweden to whom I will remain committed through my other investments.”
Mr Al Amoudi intends to become a diversified passive investor with a continued commitment to Green energy industries in Europe. This process should not be interpreted as a withdrawal from Sweden but as a strengthening of investment commitment to the country for the longer term. Mr Al Amoudi remains highly supportive of Preem’s own Green Transition and one of the drivers for this process is to secure the capital necessary to see it through to its planned conclusion.
MIDROC Ethiopia Restructures
Restructuring Prepares Mohammed’s Holdings for the Future
Mohammed Hussein Al Amoudi has announced a number of changes to the executive senior management of his companies, as well as some significant restructuring, in order to prepare MIDROC in Ethiopia for the challenges of the post-COVID-19 world and the continued modernisation and liberalisation of the Ethiopian economy.
Jemal Ahmed, formerly solely responsible for the agricultural sector within the Group, will now be Chief Executive Officer of 21 of the 30 leading companies in the Group covering not only Agriculture & Agro-Processing but Manufacturing, Commerce and Mining. This offers a coordinated executive approach to the most significant elements in the MIDROC Group (Ethiopia) according to scale and revenue.
The Four Divisions in this Core Group of Companies will each have a Deputy CEO answerable to Mr. Ahmed. Two of these are former Government officials, Dr. Bekele Bulado, former Minister of Trade, and Ato Esays Kebede, former Director of the Ministry of Agriculture, who have been appointed as Deputy CEOs of the Commerce and Agriculture & Agro-Processing Divisions respectively
Abennet Gebre-Meskel is CEO of MIDROC Ethiopia PLC (Mohammed’s main company in the Group), representing the Chairman in relation to important national initiatives as well as overseeing companies in the Hotel, Construction and Property sectors. He will continue to lead Pharmacure PLC in the pharmaceuticals sector. Haile Asegide is CEO of both Derba Cement and the United Auto Company. Dereje Yesus Work is CEO of the NTO Rainbow and Exclusive corporations which are primarily in the Tourism sector.
Mohammed remains in full ultimate authority as Chairman of the MIDROC Group in Ethiopia and all four senior CEOs answer to him directly as shareholder.
Corporate Restructuring in Sweden Part of a Global Sustainability Strategy
Mohammed Hussein Al Amoudi is reorganising his non-energy Swedish businesses branded as Midroc Europe to meet new strategic needs. The commercial and contracting companies and property development businesses within the current Midroc Europe Group will now be branded Granitor to differentiate the companies from Mohammed’s holdings outside Europe.
The operational part of the business will be majority owned by Mohammed’s close and continuing associates in Sweden, the Wikström family, although Mohammed will remain as a long term investor and minority shareholder.
Over the next few years, Mohammed will continue to prioritise long term sustainable investment such as his minority ownership in Granitor, his investments in commercial properties and his investments in a range of largely techno-innovation companies, notably in the cleantech and life science sectors. These will all be under continued management by the Wikström family on Mohammed’s behalf.
The Granitor group of companies will be managed by their committed and experienced Wikström-led team as the European Union develops its Green Agenda and manages the post-pandemic recovery. Sustainability is as central to Swedish and European managerial planning today as it is to Mohammed’s long term and wider vision.
Mohammed, commenting on this next stage of his global sustainability strategy, said, “These changes will extend the very successful long term partnership between my family and the Wikström family for generations to come. Our family relationship, which started in Sweden in 1996 and overseas even before that, remains very close.”
He continued, “I am pleased to place my trust in the sons of Lennart Wikström as they continue to manage my non-energy assets in Sweden but under a new, more formal and sustainable structure that is built to last for the benefit of future generations of our two families, of the employees and of stakeholders, of my businesses and of the planet.”
Mohammed expects his investments to contribute directly to the global Green Agenda through his sustainable European property and techno-innovation investments, working (as before) with Granitor’s local management and he will continue to do what he has always done - transfer the best and most appropriate technologies to the emergent economies of Africa.
This is just the most recent element in the implementation of a long range strategy that is concentrating resources on Africa and Saudi Arabia to which Mohammed is committed whilst still retaining a strong, valued but increasingly passive investment presence for himself in Europe. The changes will affect all Mohammed’s holdings in Sweden except the two petroleum businesses, Preem and Svenska Petroleum Exploration, which have separate and industry-appropriate sustainability strategies of their own, following the same overall vision of global sustainability.
Coronavirus and Mohammed’s companies
The COVID-19 global pandemic offers unprecedented challenges for every business and every family. There is no country in which the businesses of Mohammed Al Amoudi operates where it has not appeared - Saudi Arabia, Sweden and Ethiopia. This is something taken very seriously by Mohammed. He is concerned for the health of every staff member and employee. Each company will take those measures appropriate to their country situation in accordance with their Government’s advice but there are some general principles that guide policy across all companies.
He said, “Everyone must use their common sense in following advice, searching out those recommendations that are evidence-based and rely on best scientific assessments. We will do our best to ensure that every business can continue to operate and to help reduce the spread of the disease. Above all, we must maintain our collective morale and not allow panic to emerge. The mental health of our staff and employees at this time of great anxiety must be one of our primary concerns. We are all in this together.”
The general thrust of Mohammed’s position is to be socially responsible at every level – in assisting in the reduction of the spread of the disease, maintaining productive capacity for the future, preserving livelihoods wherever possible and ensuring that we are all strong and mentally fit for the hard work of recovery.
He added, “It would be foolish not to admit that we are likely to be adversely affected by this crisis. No business in the world is not currently putting in plans to survive rather than grow. However, my managers throughout the world have been on the case for some weeks now and I am confident that they have as good a grip as any team of managers anywhere on a situation that is changing by the day. We will do more than survive, we will use this global crisis to become stronger and so take our full part in the inevitable global recovery.”