Saudi Arabia’s economic city Emaar (Emaar EC) has received Ministry of Finance (MOF) approval to capitalize debt commissions for the period 2019-2021 totaling 363.96 million riyals (US $ 97 million) and add this amount to the cost of the loan …
This brings the total cost of loans to 5.36 billion riyals, the Riyadh-based real estate company said in a statement.
The company is also restructuring the payment of the full cost of the loan after capitalization of the commissions. The first installment will start in June 2024 with six annual payments of 760.66 million each, excluding the final payment of 800 million riyals in June 2030.
Once approved, the Ministry of Finance may partially transfer the pledged assets of Emaar EC to the Ministry under certain conditions, including a review of the company’s future business plans.
Emaar EC developing the economic city of King Abdullah has signed an agreement with State investment fund (PIF) to transfer 283.3 million shares of the company to the sovereign wealth fund last year in lieu of repaying the company’s 2.83 billion riyals loan from the Ministry of Finance. The deal will allow the mutual fund to own 25% of the company’s shares.
In March, the company announced that it had partially completed the novation of the 2.83 billion riyals loan provided by the Ministry of Finance to the Fund.
Emaar EC said Sunday that if a portion of the Treasury loan for PIF is converted under the subscription agreement, the carry-over amount due to be paid would be 2.53 billion riyals. The first maturity date is June 2024 with a six-year period ending in June 2030, the company added.
For the full year 2020, Emaar EC reported losses of 2.66 billion riyals, equivalent to 31 percent of equity.
(Screenplay by Brinda Darash; Editing by Seban Scaria)
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