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Below is a Strategic Minority Equity Investment Structure tailored for a Saudi commodity trading arm / family office that wants control without operational burden, aligned with offtake security, asset-backing, and Shariah principles.
This is written as a board-level decision note, suitable for IC papers.
STRATEGIC MINORITY EQUITY STRUCTURE
Agarwood & Supercritical CO₂ Extraction (SFE)
(Saudi Strategic Partner × CESI Platform)
1. What “Strategic Minority” Means Here
The Saudi investor holds less than 50% equity, but secures:
- Priority offtake
- Commercial veto rights
- Asset security
- Expansion control
This is influence, not operations.
2. Equity Position
- Equity Stake: 15–30%
- Role: Strategic investor (non-operator)
- No day-to-day management responsibility
- CESI remains operating partner
3. Capital Use
Saudi capital is deployed into:
- SFE equipment (asset-backed)
- Capacity expansion linked to offtake
- Quality, halal certification, and traceability systems
Capital is ring-fenced and tied to productive assets.
4. Control & Protection Rights (Key to Minority Comfort)
Despite minority equity, Saudi partner receives:
- Reserved Matters (Veto Rights)
- Change in business scope
- Sale or encumbrance of core assets
- Changes to offtake pricing formula
- New debt issuance
- Related-party transactions
- Commercial Control
- Priority offtake: 50–70% of production
- Right to nominate grades/specifications
- First refusal on expansion capacity
- GCC market exclusivity (optional)
- Information Rights
- Monthly operational dashboards
- Quarterly financial reporting
- Annual third-party audits
5. Returns Profile
| Return Source | Description |
|---|---|
| Dividends | Pro rata to equity |
| Trading Margin | Offtake-based uplift |
| Expansion Upside | Capacity add-ons |
| Exit Premium | Strategic buyout option |
Target IRR: 15–22% (USD) depending on utilization and expansion.
6. Asset Security (Minority-Friendly)
- First lien on SFE equipment proportional to capital
- Title retention on offtake products
- Step-in rights upon material default
- Offshore asset holding structure
This ensures capital preservation, not just upside.
7. Shariah Compatibility
- Equity = Mushārakah
- Returns from trade & production
- No guaranteed yield
- Asset-backed deployment
Fully consistent with Shariah investment principles.
8. Exit Options
- Call Option: Saudi partner may increase stake
- Put Option: Exit at pre-agreed multiple
- Tag-Along / Drag-Along
- Sale to strategic buyer or Saudi downstream JV
9. Why This Structure Works for Saudi Investors
- Exposure to heritage asset class
- Downside-protected entry
- Strategic supply secured
- Optional scale-up
- No operational distraction
10. One-Line Strategic Thesis
A minority stake that delivers majority strategic value—secured supply, asset protection, and disciplined upside.