EEC reschedules King Abdullah Economic City loan facility
The main reason for the rescheduling of loans is for facilitation of the company’s cash flow position and boosting its ability to move forward with its growth plans
Master developer Emaar, The Economic City (EEC) has said it has reached an agreement with leading Saudi Bank SABB to reschedule its existing loan of $260m of the total outstanding $532m. EEC is the master developer of Jeddah-based King Abdullah Economic City.
According to a statement, EEC is a consortium headed by Emaar Properties and Saudi investors, focusing on building King Abdullah Economic City (KAEC), a special economic zone on Saudi Arabia’s Red Sea coast near Jeddah. One of the largest and most significant privately-run economic projects in the world, KAEC is centered on the establishment of a 185m sqm integrated city by the Red Sea coast north of Jeddah.
EEC said it had reached a deal with SABB on revising the terms of the sharia compliant outstanding facility as per the following: the amended terms of the Sharia Compliant Term Loan Facility (Tawarroq) amounting to $260m, which includes a grace period up to June 2023, and a repayment starting from (June 2023 to December 2029) in semi-annual installments.
The main reason for the rescheduling of loans is for facilitation of the company’s cash flow position and boosting its ability to move forward with its growth plans, said EEC in its filing to the Saudi bourse Tadawul, the statement explained.
According to EEC, it obtained a Islamic Murabaha loan worth $533m from Saudi British Bank in 2014. The total current facilities amount to $338.5m, while the rescheduled part of the outstanding long-term loan is $260m.
As per the 2014 agreement, EEC said it would use the loan amount to build residential and infrastructure projects within KAEC. Prior to the rescheduling, the loan was to have matured in September last year. But with this deal, EEC has extended to December 2029.
The current facility also includes an existing working capital facility amounting to $80m, which includes Short Term (Tawarroq), Guarantee and Letter of Credit Facilities.
