Riyadh – Mubasher: The board members of Emaar The Economic City (EEC) approved a transformative business strategy in line with Saudi Vision 2030, according to a press release.
This strategy covers a SAR 8.70 billion capital optimisation plan (COP) that includes restructuring the company’s SAR 3.80 billion in bank debt facilities, the full conversion to share capital of SAR 4 billion of its debt owed to the Public Investment Fund (PIF), and a new convertible shareholder facility of up to SAR 1 billion from PIF.
Developed based on extensive assessment and analysis over the past two years, the COP is expected to provide a comprehensive solution to stabilise the company’s financial and operational platforms and enhance its capital structure.
It also backs Emaar The Economic City’s partnership with key stakeholders, including PIF, and its commercial lenders, such as Alinma Bank, Saudi Awwal Bank (SAB), Banque Saudi Fransi, and The Saudi National Bank (SNB).
The COP aims at restructuring and syndication of all the company’s existing bilateral credit facilities with the four listed banks amounting to SAR 3.80 billion. This will re-align the repayment schedules for its bank debt facilities to match the group’s investment plan and liquidity profile.
Capital Reduction
Emaar The Economic City will also implement a 49.69% capital decrease to offset accumulated losses, which hit SAR 5.63 billion as of 30 June 2024. The transaction will have no adverse impact on the company’s operations.
Following the capital cut, the new capital will stand at SAR 5.70 billion distributed over 570.21 million shares, compared to SAR 11.33 billion and 1.13 billion shares.
Subject to the general assembly’s approval, the company will eliminate 563.11 million shares by cancelling 0.496 share for every owned share.
Strategic Focus
Emaar The Economic City’s strategic priorities will focus on real estate and operations. The three strategic pillars of its real estate business are city master development, real estate development and asset management.
In this regard, the company plans to attract and retain reputable real estate developers and investors, while executing a more efficient and optimised master plan for King Abdullah Economic City (KAEC).
As for Special Economic Zone (SEZ) operations, the real estate developer will leverage reputable Industrial Valley tenants to attract more businesses.
Fahad Al Saif, Chairman of Emaar The Economic City, commented: “The implementation of the COP will enable the company to capitalise on available opportunities to align its direction with Saudi Vision 2030. It also provides the blueprint for a stable platform for growth, focused on unlocking the full potential of KAEC and enhancing the sustainability of our business.”
Abdulaziz Ibrahim Alnowaiser, CEO of Emaar The Economic City, said: “We are evaluating a series of further structural and functional measures to ensure EEC returns to full financial health, strengthening our key relationships with various stakeholders, in addition to refreshing our long-term strategy periodically to establish a clear roadmap for reviving the company’s ability to achieve its core mission of developing this exceptional property and delivering shareholder value.”
