APICO signs SAR 105.5 mln facilities agreement with SAIB

Logo of Arabian Plastic Industrial Co. (APICO) 

Arabian Plastic Industrial Co. (APICO) signed, on March 22, a SAR 105.5 million banking facilities agreement with The Saudi Investment Bank (SAIB) to finance working capital and medium-term loans. 

The facilities will be used in expanding core production activities and supporting the company’s growth (SAR 55.5 million for expansions and SAR 50 million for existing operations), APICO said in a statement on Tadawul. 

Renewals of current banking facilities include a working capital facility limit of SAR 47 million for a tenure of a 12 months, and a medium-term loan of SAR 3 million to be matured during 2023. 

The new banking facilities comprise a working capital limit of SAR 33.5 million available for 12 months combined with a sublimit of a medium-term loan of SAR 30.15 million to be settled in 26 quarterly installments after six months of compiling the complete loan drawdowns. 

Additionally, it contains a working capital limit of SAR 22 million combined with a sublimit of a medium-term loan of SAR 19.8 million to be settled in 22 quarterly installments after six months of compiling the complete loan drawdowns. 

The facilities are covered by a promissory note by APICO, and a corporate guarantee by Omar Abu Bakr Balubaid Co., a related party, covering the full exposure, the statement added. 

The amount is intended to go towards financing the working capital requirements of the existing APICO facility, opening letters of credit (LCs) for the purchase of raw materials and funding a new production facility in Riyadh (Al-Kharj). 

[[[Related parties to this transaction include Omar Abu Bakr Balubaid Co., which provided a corporate guarantee covering the full exposure. ]]]] Delete this P.

Financing for the new APICO production facility in Al-Kharj, Riyadh is related to an earlier announcement about the land lease contract signed with the Saudi Authority for Industrial Cities and Technology Zones (MODON), the company noted. 

According to data available on Argaam, APICO signed, in November 2022, a 20-year land lease agreement with MODON, at an annual lease value of SAR 68,541, or SAR 1.4 million in total, excluding value-added tax (VAT).