Emaar EC gets finance ministry nod to capitalize debt commissions, restructure SAR 5.36 bln loan

Logo of King Abdullah Economic City

Emaar the Economic City (Emaar EC) received the Ministry of Finance approval to capitalize debt commissions for the years from 2019 to 2021 at a total value of SAR 363.96 million and add it to the loan value, bringing its gross value to SAR 5.36 million.

The company will also restructure the payment of the loan gross value after the debt commission capitalization, with the first installment starting in June 2024 and for an equal six-year annual payments of SAR 760.66 million, except for the last payment worth SAR 800 million in June 2030.

The approval is conditional on amending the loan agreement signed between Emaar EC and the Ministry of Finance, the real estate developer said in a statement to Tadawul.

Based on this approval, the finance ministry can partially release Emaar EC’s pledged assets in favor of the ministry under certain conditions, including the ministry’s review of the company’s future business plans.

If part of the finance ministry’s loan to the Public Investment Fund (PIF) is converted, under the subscription agreement concluded last March, the due rescheduled amount to be paid will stand at SAR 2.53 billion. The first maturity date will fall in June 2024 under a six-year period ending in June 2030, the company added.

On Aug. 31, 2020, Emaar EC entered into a share subscription agreement with the PIF, Argaam earlier reported.

The company added that discussions are ongoing between the Ministry of Finance and the PIF with respect to novation of part of the loan due to MoF following the loan agreement on May 23, 2011, and amended on June 4, 2015, to PIF for a total amount of SAR 2.83 billion (the novation).