The company said in a statement to the Saudi Stock Exchange that the aim of the restructuring is to “improve its ability to move forward in achieving its growth plans.”
Emaar, The Economic City is responsible for developing the King Abdullah Economic City project on an area of 168 million square meters near the Red Sea coast, north of Jeddah.
According to the statement, the restructuring plan includes scheduling bank facilities, as the company has concluded a non-binding memorandum of terms to reschedule its existing facilities with Alinma Bank, Saudi First Bank, Saudi Fransi Bank, and National Commercial Bank.
The agreement aims to reschedule all the company’s outstanding facilities and amounts to banks, amounting to approximately SAR 3.471 billion ($924.7 million), and unify their provisions under one unified agreement.
As part of the rescheduling, the banks will provide new credit facilities to the company for a total amount of approximately SAR 301.4 million.
As part of the restructuring plan, the company signed a non-binding memorandum of terms with the Public Investment Fund regarding a potential shareholder loan with a maximum of up to one billion riyals.
As part of the plan, the Board of Directors also recommended to shareholders to reduce capital by 5.631 billion riyals by cancelling 563 million shares of the company, representing 49.69 percent of the capital, to extinguish the accumulated losses as of June 30.
The Board of Directors also recommended increasing the capital by converting the debt owed to the Public Investment Fund, amounting to 3.972 billion riyals, into new ordinary shares, which includes the financial liabilities and obligations owed by the company and owed to the Fund.
The statement said that reducing and increasing capital through debt conversion is subject to the approval of the relevant regulatory authorities and the approval of the company’s extraordinary general assembly. The terms memoranda with the banks and the fund are non-binding and are subject to agreement on the final binding agreements between the parties.
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