Jabal Omar restructures debts from Saab, SNB for SR5.9 bln

Jabal Omar Development Company announced it has signed an agreement to restructure the Islamic term financing (the “Facility”) provided by SABB and SAMBA (SNB currently) under certain financing the agreements originally entered into on May 2015.

The company said that then key terms of the restructuring included the following reinstating SR 1.2 billion of available limit to be drawn, extending the facility’s final maturity by 3 years from the date of maturity of the original financing; with an option to extend by a further 3 years, subject to certain pre-agreed conditions.

It also included sculpted amortization schedule based on the underlying projects’ cash flows with sufficient headroom, scheduled repayments will initiate after a grace period of 3 years as well as scope for step-down in profit rate based on achieved progress on Phases 2 and 4 of the Project and deleveraging of the facility.

The financing restructuring comes as part of the transformation plan to improve the capital structure, reduce financing costs and advance the completion of the project phases.

‘The reason for rescheduling the financing is to provide the necessary financing to complete the second and fourth phases of the Jabal Omar project and to obtain better terms commensurate with the company’s cash flows and capital structure.’ the company indicated.

Total financing limit before restructuring was SR4.7 billion, while total financing limit after restructuring is SR5.9 billion.

The tenor of the original facility was 12 years from the date of signing the agreement on May 2015, while the tenor of the restructured facility is 9 years from the date of signing the agreement to restructure the facility on October 2021; with an option to extend by a further 3 years subject to certain pre-agreed conditions.

No guarantees or additional security offered as part of this process.

It is worth noting that this transaction involves a related party; as the Chairman of the Board, Mr. Saeed Alghamdi, is the ED and CEO of the Saudi National Bank. The company will present this contract to the general assembly to obtain its approval.