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RIYADH: Saudi developer Emaar, The Economic City, has signed a binding restructuring agreement with the Public Investment Fund for a loan deal valued at SR1 billion ($266 billion). 

Under the terms of the agreement, the availability period of the new loan is 18 months from the signing date of the amendment and restatement deal, according to a Tadawul statement. 

Emaar, the master developer of King Abdullah Economic City on the Red Sea coast, said that the restructuring plan is part of its capital optimization strategy, designed to stabilize the company’s financial and operational stability and optimize its capital to support its growth plans.

“The form of this agreement was an amendment and restatement agreement to the shareholder loan already in place with the PIF in relation to the previous fully utilized SR1,000 million shareholder loan entered into on 19 February 2023,” said Emaar in the statement. 

The company further said that the loan repayment should be made in a lump sum on the day, which marks 24 months from the date of the agreement, including the principal amount and the commission. 

The loan is covered by real estate mortgages valued at no less than SR1.5 billion and promissory notes for the principal and commission amounts.

The statement added that the deal includes an option for the wealth fund to convert the outstanding amounts under the loan to shares within the company’s capital, subject to approvals of the relevant regulatory authorities and the firm’s shareholders. 

PIF is considered a related party in the deal, as it is one of the major shareholders in the company.

In October, Emaar revealed that its net loss widened to SR1.15 billion in the first nine months of 2024, compared to SR49 million in 2023. 

In a Tadawul statement, the company attributed the loss to a 74 percent year-on-year slump in revenue, which reached SR241.16 million in the first nine months of 2024 compared to SR926.35 million in the same period in 2023.

In the third quarter of 2024, the company swung to a net loss of SR459 million, compared to a net profit of SR27 million in the year-ago period. 

RIYADH: Saudi Arabia has raised SR2.64 billion ($704 million) through sukuk issuances in March as the Kingdom continues to explore opportunities in debt markets to accelerate economic diversification efforts. 

The latest riyal-denominated offering follows an SR3.07 billion issuance in February and SR3.72 billion in January. 

Saudi Arabia also raised SR11.59 billion in December and SR3.41 billion in November. 

The Kingdom has been playing a pivotal role in the global sukuk market, leveraging debt sales to finance projects under its Vision 2030 economic transformation plan.

According to a statement by Saudi Arabia’s National Debt Management Center, the issuance for March was divided into four tranches, with the first one valued at SR364 million and set to mature in 2027. 

The second tranche has a value of SR316 million, due in 2029, while the third, at SR1.46 billion, is set to mature in 2032.

The fourth tranche worth SR500 million will expire in 2039.

Sukuk, a Shariah-compliant financing instrument, allows investors to hold partial ownership of an issuer’s assets while adhering to Islamic finance principles. 

Saudi Arabia’s debt market has seen significant growth in recent years, attracting investors’ interest in debt instruments amid rising interest rates.

In March, a report released by Kuwait Financial Center, also known as Markaz, said that Saudi-based primary issuances of bonds and sukuk led the Gulf Cooperation Council region in 2024, raising $79.5 billion through 79 issuances.

Markaz added that the Kingdom contributed to 53.7 percent of the overall primary debt issuances in the GCC region in 2024.

In February, Saudi Arabia also raised €2.25 billion ($2.36 billion) through a euro-denominated bond sale, including its first green tranche, as part of its Global Medium-Term Note Issuance Program.

Affirming the growth of the market of such Islamic bonds, S&P Global, in January, said that global sukuk issuance is projected to hit between $190 billion and $200 billion in 2025, driven by increased activity in key markets, including Saudi Arabia and Indonesia. 

In December, another report released by Kamco Invest projected that the Kingdom is expected to witness the greatest share of bond and sukuk maturities in the GCC, reaching $168 billion from 2025 to 2029. 

According to Kamco Invest, Saudi Arabia’s maturities will be led by government issuances that are projected to hit $110.2 billion during the period.