Saudi Arabia: Saudi developer Emaar, The Economic City, has signed a binding restructuring agreement with the Public Investment Fund for a loan deal valued at SR1 billion ($266 billion). 

Under the terms of the agreement, the availability period of the new loan is 18 months from the signing date of the amendment and restatement deal, according to a Tadawul statement. 

Emaar, the master developer of King Abdullah Economic City on the Red Sea coast, said that the restructuring plan is part of its capital optimization strategy, designed to stabilize the company’s financial and operational stability and optimize its capital to support its growth plans.

“The form of this agreement was an amendment and restatement agreement to the shareholder loan already in place with the PIF in relation to the previous fully utilized SR1,000 million shareholder loan entered into on 19 February 2023,” said Emaar in the statement. 

The company further said that the loan repayment should be made in a lump sum on the day, which marks 24 months from the date of the agreement, including the principal amount and the commission. 

The loan is covered by real estate mortgages valued at no less than SR1.5 billion and promissory notes for the principal and commission amounts.

The statement added that the deal includes an option for the wealth fund to convert the outstanding amounts under the loan to shares within the company’s capital, subject to approvals of the relevant regulatory authorities and the firm’s shareholders. 

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

In October, Emaar revealed that its net loss widened to SR1.15 billion in the first nine months of 2024, compared to SR49 million in 2023. 

In a Tadawul statement, the company attributed the loss to a 74 percent year-on-year slump in revenue, which reached SR241.16 million in the first nine months of 2024 compared to SR926.35 million in the same period in 2023.

In the third quarter of 2024, the company swung to a net loss of SR459 million, compared to a net profit of SR27 million in the year-ago period.