Emaar EC finalizes $904m debt restructuring deal with Saudi banks

29/04/2025 03:36 AST

Saudi developer Emaar, The Economic City has signed final agreements with four local banks to reschedule SR3.39 billion ($904 million) in existing debt and secure a new credit facility.

In a bourse filing, the company - the developer of King Abdullah Economic City - announced that it had secured the deals on April 27 with Alinma Bank, Saudi Awwal Bank, Banque Saudi Fransi, and Saudi National Bank. This follows a non-binding term sheet signed in September.

The agreement consolidates existing loans, extends repayment deadlines, and provides a new SR287.2 million credit facility. The rescheduled debt, previously due between 2021 and 2029, will now mature on Dec. 31, 2033, with repayments starting in 2029.

According to a statement, the restructured debt is split into two tranches, with the second potentially extending its maturity to 2036, while the new short-term facility must be repaid by mid-2026, subject to an optional one-year extension.

In its official statement on Tadawul, Emaar, The Economic City said: "This rescheduling comes as part of the company's announced capital optimization plan, designed to stabilize the company's financial and operational positions and optimize its capital structure to enhance its ability to move forward with its growth plans."

To secure the deal, the company pledged real estate mortgages covering 150 percent of the rescheduled debt and 175 percent of the new facility, along with account security and promissory notes.

The restructuring is expected to enhance liquidity and reduce financing costs, aligning with Emaar, The Economic City's long-term strategy. Saudi National Bank is classified as a related party due to its ties with the Public Investment Fund, a major shareholder in the company.

The developer has been undergoing financial restructuring to stabilize its operations amid widening losses. In the first nine months of 2024, the company reported a net loss of SR1.15 billion, driven by a 74 percent decline in revenue.

In March, the firm strengthened its financial position through a SR1 billion restructured loan agreement with PIF, a key component of its capital optimization strategy that provided extended repayment terms and enhanced liquidity.

Arab News