Emaar EC signs binding amendment, restructuring agreement with PIF

Emaar The Economic City’s (Emaar EC) signed on March 18 a binding amendment and restructuring agreement for the existing shareholder loan agreement with the Public Investment Fund  (PIF), in order to provide a loan of up to SAR 1 billion.

According to a statement to Tadawul, Emaar EC pointed out that the agreement was made through the modification and restructuring of the existing shareholder loan agreement with the PIF, which pertains to the previous loan of SAR 1 billion that was fully utilized, signed on Feb. 19, 2023.

The loan tenor will extend for 18 months from the date of signing the amendment and restructuring agreement. Repayment will be made in a lump sum on the day that marks 24 months from the date of the agreement, including the principal amount and commission.

The loan is covered by real estate mortgages valued at no less than SAR 1.5 billion, in addition to issuing promissory notes covering the principal amount and commission, the statement added.

The agreement includes an option for the PIF to convert the outstanding amounts under the shareholders loan to shares within the company’s capital, subject to approvals of the relevant regulatory authorities and the company’s shareholders, the statement noted, highlighting that the conversion formula was agreed upon.

The PIF is considered a related party, as it is one of the major shareholders in the company.

The loan is intended to cover capital expenditure and project costs.

The signing of the amendment is part of the company's financial restructuring plan, aimed at strengthening its financial and operational stability and restructuring its capital to support its growth plans.

According to data available with Argaam, Emaar EC announced inking a non-binding term sheet on Sept. 7 with the PIF on a potential shareholder loan at SAR 1 billion maximum.

Pursuant to the term sheet, both parties agreed to negotiate a potential shareholder loan of up to SAR 1 billion and agreed on the preliminary provisions.

Both parties also agreed that the shareholder loan will include an option for the PIF to convert the outstanding amounts under the shareholder loan to shares within the company’s capital, subject to the approvals of the relevant regulatory authorities and the approval of the company’s shareholders.