Kuwait - Alargan International Real Estate announced that it has signed a banking facility contract valued at KWD 66.5 million with a local bank.
The agreement comes in line with Alargan’s efforts in regulating and coordinating its financial structure as well as the redistribution of risks related to its debt instruments, according to a disclosure to Boursa Kuwait on Tuesday.
Hence, Alargan is working to transfer its short and medium-term liabilities into long-term ones, which will positively reflect on the company’s financial solvency.
The first tranche of the credit facilities shall provide a value of KWD 53.96 million to be invested in settling the company’s liabilities to local banks.
The second tranche has a value of KWD 11.04 million and to be invested in financing development and upgrade works of some projects and related expenses, in addition to letters of guarantee valued at KWD 1.5 million, the company remarked.
The loan will have a repayment period of six years during which the company shall pay annual installments starting from July 2022 to July 2025, with a 2.5% interest rate above the discount price announced by the Central Bank of Kuwait (CBK), according to the disclosure.
The banking facility agreement is expected to positively reflect on the company’s consolidated financial statements, Alargan highlighted.
It is worthwhile to mention that during the second quarter of 2019, Alargan’s profits rose by 59.3% to around KWD 21,090 from about KWD 13,240 in Q2-18