MARAFIQ signed asset lease agreement in Yanbu industrial city for SAR 45.6 million

Power and Water Utility Company for Jubail and Yanbu (Marafiq) signed a new asset lease agreement with the Royal Commission for Jubail and Yanbu covering group some assets in Yanbu Industrial City, with a value of SAR 45,610,108.28 and a contract duration of 25 years as of the date on which “Marafiq” receives each one of those assets.

The company stated on Sunday on Tadawul that the expected annual rental cost of these assets, in the event of full commercial operation, will be SAR 1,824,404.31 for a period of 25 years.

This comes subject to the Council of Ministers Resolution No. 57 dated 7.12.1999, which states that the Royal Commission for Jubail and Yanbu (“RC”) shall lease the basic equipment of service in Jubail and Yanbu industrial cities to Marafiq, provided that Marafiq will own these assets at the end of the lease term.

Accordingly, Marafiq executed Master Lease Agreement with RC on 11.10.2006 (“MLA”) where Marafiq received the basic equipment of service from RC during Marafiq’s foundation era. As per the MLA, all the future leases of the basic equipment of service shall be governed by the same mechanism mentioned in the MLA, and the rent will be commenced at the starting date of operating the relevant service assets, provided that the rent is commensurate with the percentage of actual commercial operation of those service assets. Accordingly, Marafiq executed a number of lease agreements with RC in its expansion cities in Jubail and Yanbu to meet the future demands of utility services or to increase the reliability of its business towards all its customers.

For more information, please refer to the IPO prospectus issued by Marafiq in paragraph: “Unsigned finance lease contracts with the Royal Commission for Jubail and Yanbu” page No. 191.

Additional Information:

• These assets will enable Marafiq to increase the reliability of its business towards all its customers, in addition to meeting the future demands of utility services.
• The date of award is the Council of Ministers’ resolution dated 7.12.1999.