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Saudi Arabia’s Emaar the Economic City (Emaar EC) has received the Ministry of Finance (MoF) approval to capitalize debt commissions for the years from 2019 to 2021 at a total value of 363.96 million riyals ($97 million) and add it to the value of the loans.
This brings the gross value of the loans to 5.36 billion riyals, the Riyadh-listed real estate company said in a bourse filing.
The company will also restructure the payment of the gross value of the loan after capitalization of commissions. The first installment will begin in June 2024 with six annual payments of 760.66 million each, except for the last payment which will be 800 million riyals in June 2030.
Following the approval, the finance ministry can partially release Emaar EC’s pledged assets in favor of the ministry under certain conditions, including a review of the company’s future business plans.
Emaar EC, which is developing the King Abdullah Economic City, signed a deal with the Public Investment Fund (PIF) last year to allot 283.3 million shares of the company to the sovereign wealth fund in lieu of it repaying the company's 2.83 billion riyals loan from MoF. The deal will allow PIF to hold a 25 percent stake in the company.
In March, the company said it had partially executed the novation of the 2.83 billion riyals loan from the MoF to the PIF.
In Sunday’s statement, Emaar EC said if part of the finance ministry’s loan to the PIF is converted under the subscription agreement, the due rescheduled amount to be paid will stand at 2.53 billion riyals. The first maturity date will fall in June 2024 under a six-year period ending in June 2030, the company added.
For full-year 2020, Emaar EC posted losses of 2.66 billion riyals, which is equivalent to 31 percent of capital.
(Writing by Brinda Darasha; editing by Seban Scaria)
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© ZAWYA 2021
