Alinma Retail REIT plans to repurchase 10M units as treasury units

Alinma Retail REIT’s board of directors approved on Dec. 29 the repurchase of 10 million cash units, fund manager Alinma Capital said in a statement to Tadawul.

The repurchase is aimed at holding the units as treasury units for use in asset swap transactions when acquiring new assets, or selling them in the future, as the fund’s board believes the current unit price is below its fair value.

The repurchase will be financed from one or more sources, including proceeds from the sale of low-yielding assets, the fund’s credit facilities, and surplus cash flows, in a manner that serves the interests of unitholders without affecting distributions.

It clarified that treasury units would represent 8.47% of the fund’s issued units. The decision to repurchase units is subject to unitholders’ approval through a special resolution, authorizing the fund manager to complete the repurchase within a maximum period of 12 months from the date of the special resolution.

The company noted that the repurchase will be conducted through the market and not via a private transaction. Treasury units acquired by the fund will not carry any voting rights at unitholders’ meetings.

It added that the execution of unit repurchases will depend on market developments and the unit price. Accordingly, the decision to proceed with the repurchase is at the discretion of the fund manager and is not mandatory.