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Jabal Omar Development Company, one of Saudi Arabia’s top-rated real estate developers, said on Tuesday it had signed an agreement to restructure a 4.7 billion riyal ($ 1.25 billion) loan granted in 2015, including by increasing it and lengthening its maturity.
The facility, provided by Saudi British Bank (SABB) and Samba Financial Group, will have a draw limit of 5.9 billion riyals, about a quarter more than its original size and repayments will begin after a period of time. three-year grace period, Jabal Omar said in an exchange brief.
The company, which has recorded eight consecutive quarterly losses before making a profit of 270.6 million riyals in the quarter ended in June, is developing projects of “strategic importance”, the Saudi finance ministry told Reuters.
Samba is now the Saudi National Bank (SNB) after its merger with the National Commercial Bank. Jabal Omar’s Chairman of the Board, Saeed Alghamdi, is the CEO of SNB.
The loan maturity will be extended for three years until 2030, with an option for another three-year extension if the preconditions are met.
The initial agreement, signed in March 2015, was for 12 years.
The company said the restructuring is necessary to complete phases 2 and 4 of the Jabal Omar project and improve conditions in line with the company’s cash flow and capital structure.
He indicated that there was an option to reduce the future rate of the loan based on progress made on phases and in deleveraging.
The company operates the complex of Jabal Omar hotels and residential and commercial properties within walking distance of the Grand Mosque in the Muslim holy city of Mecca.
He was hit hard when the pandemic reduced pilgrimages.
Expanding religious pilgrimages, which before the pandemic attracted millions of Muslims around the world each year, is part of the government’s Vision 2030 to diversify the economy and reduce dependence on oil.
In March, the company secured 1.6 billion rials in financing backed by a guarantee from the finance ministry.