Bank Al-Jazira (BAJ) said that it has signed a memorandum of understanding to divest its stake in a vacant land plot located in Jeddah.
The lender sold it to a real estate company for SAR 750 per square meter, totaling SAR 1.19 billion. BAJ expects to generate a one-off gain of SAR 572.6 million, as the book value of its stake in this land reached SAR 616 million.
The one-time profit will be recognized in Q1-2015 financial statements.
BAJ owns 50.7 percent, or 1.58 million square meters of the 3.13 million square meter-land.
Aman Development and Real Estate, a subsidiary of BAJ, was a party to the MOU signed as the title deed is registered in its name.
Throughout the two-month MOU, the parties will finalize the ownership transfer procedures, including the issuance of an updated preliminary drawing of the land.
The bank will receive the deal value in two installments, with SAR 50.7 million paid as a deposit and unrecoverable if the deal is not concluded.
The remaining amount of SAR 1,138 million will be paid upon the title deed transfer before a competent notary public.
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