SAL details agreement with Tibah Airports to develop new cargo terminal

SAL Saudi Logistics Services Co.’s agreement with Tibah Airports Operation Co. for the lease of land at Prince Mohammed Bin Abdulaziz International Airport in Madinah is valued at SAR 420,000 per year, or a percentage of the revenue, whichever is higher.

The percentage of the revenue was set at 2% for the first 10 years and 2.5% for the rest of the contract period, SAL said in a statement to Tadawul.

The agreement is valid for three months, during which SAL must sign the lease for a period of 16 years.

The land under lease spans 3,500 square meters, plus another 4,000 square meters is reserved for three years in case SAL seeks to expand.

The deal will cut rental costs by SAR 34.35 million over the contract period, SAL said, adding that it expects to invest an estimated SAR 12 million in the development of the new terminal to boost capacity and efficiency.

There are no related parties in the transaction, the statement said.

According to data compiled by Argaam, SAL and Tibah Airports signed on March 21 a 16-year agreement to establish a new air cargo terminal at Prince Mohammad Bin Abdulaziz International Airport in Madinah.