Dr. Sulaiman Al Habib transforms medical center project in Riyadh into hospital at cost of SR539 mln

Dr. Sulaiman Al Habib Medical Services Group announced on Monday the approval of the Board in its meeting held on Sunday, 18/12/2022 to establish a new hospital project in Riyadh City by converting the Medical Center at Al Hamra district in Riyadh City to a hospital (the “Project”).

The Project will be built on land with an area of (13,300) square meters that is located on King Abdullah Road in Al Hamra district, Riyadh City, which is owned by Al Marakez Al Awwalyah for Healthcare Company (a subsidiary company).

The estimated total built-up area of the Project is (54,115) square meters, with a capacity of (90) beds, at an estimated cost of SR (539) million.

The ownership of the Project’s land will be completely transferred to a new company that will be established for this Project, which will be a subsidiary owned 100% by the Company.

Any other developments related to this Project will be disclosed in due course and after obtaining the required regulatory approvals.

The project start date works on the establishment of the Medical Center -which was announced as part of the Company’s strategy to expand the medical center services on October 25, 2021- has started during the second quarter of 2022, and the work on the Project is still ongoing to date, further the Company will initiate the work to obtain the necessary approvals from the relevant authorities to convert the Project from a Medical Centre to a hospital.

The estimated total cost of the Project is SR (539) million. The Project will be funded by the Company’s internal resources and by long-term Shariah-compliant loans from local banks.

The Project is expected to be completed during the first quarter of the year 2025, subject to obtaining approvals from the relevant authorities

The Project is expected to have an impact on the financial results of the Company from commencement of operations, expected to commence during the second quarter of the year 2025.

The Company’s management expects that the commercial operations of the Project will begin during the second quarter of the year 2025, after obtaining the approval of the Ministry of Health.

The contract of structural works for the Medical Center has been signed with MASAH construction company (a related party) on March 08, 2022 for an amount of SR (63,283) thousands (including VAT), and this contract has been approved by the Company’s General Assembly in its meeting dated April 18, 2022. Further, amendments will be made to the designs of the Project to be a hospital, and accordingly the Company expects that there will be changes in the scope of work and the cost of the contract of structural works for the Project that has been signed with MASAH Construction Company (a related party).

The final value of the contract will be presented to the General Assembly of the Company in accordance with the relevant regulations and any developments will be disclosed as soon as become available.

Related Parties:

1. Dr. Sulaiman Abdulaziz Al Habib (Chairman of the Board of Directors) (Indirect interest)
2. Mr. Hesham Sulaiman Al Habib (Member of the Board of Directors) (Indirect interest)