Emaar Economic City unveils comprehensive restructuring plan
(MENAFN) On Sunday, Emaar Economic City, a key player in developing the King Abdullah Economic City project, announced a strategic restructuring of its financial position aimed at revitalizing its growth trajectory. The restructuring plan includes a series of financial maneuvers designed to optimize the company's financial stability and operational efficiency. Key elements of the plan involve restructuring existing bank facilities, which includes negotiating new terms with Alinma Bank, Saudi First Bank, Saudi French Bank, and National Commercial Bank. The company has reached a non-binding agreement to consolidate approximately SAR 3.471 billion (USD924.7 million) in outstanding debts under a unified agreement and secure additional credit facilities amounting to SAR 301.4 million.
Additionally, Emaar Economic City is set to undergo a significant capital restructuring. The company has signed a non-binding memorandum of terms with the Public Investment Fund (PIF) for a potential shareholder loan of up to SAR 1 billion. This move will involve the PIF becoming a shareholder in exchange for the company's outstanding debts to the fund. To further streamline its financial structure, the company's Board of Directors has proposed a capital reduction of SAR 5.631 billion through the cancellation of 563 million shares, which represents nearly 50 percent of the company's current capital. This reduction is intended to offset accumulated losses as of June 30, thereby reinforcing the company's financial foundation and supporting its long-term growth objectives.
The overarching goal of these financial adjustments is to enhance Emaar Economic City's capacity to advance its development plans for the King Abdullah Economic City, a major project covering 168 million square meters along the Red Sea coast, north of Jeddah. Through these strategic moves, the company aims to improve its financial health and better position itself for future growth and development.
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