Saudi Fransi to advise Emaar the Economic City on $753mln capital hike debt conversion

The reason for the debt conversion is to improve the company’s liquidity and credit position and enhance its ability to achieve its growth objectives, the developer said

  
Saudi people walk at the new KAEC terminal of the Haramain speed train at King Abdullah Economic City, near Jeddah, Saudi Arabia September 18, 2018.

Saudi people walk at the new KAEC terminal of the Haramain speed train at King Abdullah Economic City, near Jeddah, Saudi Arabia September 18, 2018.

REUTERS/Stephen Kalin
 
DUBAI: Emaar The Economic City has hired Saudi Fransi Capital to advise on a capital increase through the conversion of a SR2.83bn ($753 million) loan owed to the Public Investment Fund.


It comes after a tough year for the developer behind King Abdullah Economic City as the pandemic slowed major construction projects worldwide.

“The reason for the debt conversion is to improve the company’s liquidity and credit position and enhance its ability to achieve its growth objectives,” the developer said in a stock exchange filing on Thursday. “The capital increase will not result in any financial liability on or require any cash contribution by the company’s shareholders.”

The developer in March reported widening 2020 losses as it recorded an impairment of SR316 million on properties available for sale and lease and other operating assets.

The capital hike through debt conversion is subject to market and shareholder approval.

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