Tabuk Cement inks Islamic facility deals with Bank Albilad

Tabuk Cement Co. has signed on Tuesday two shariah-compliant loan facility agreements with Bank Albilad, the cement producer said in a statement to Tadawul on Wednesday.

Under the first agreement, the company will receive a SAR 478.6 million loan facility that shall pay for rescheduling two debts. Its tenure extends for seven years beginning March 30, 2017, with a grace period of one year.

The facility will reschedule a SAR 390.8 million loan that started on June 22, 2016 and were to be paid over 20 quarterly installments until March 22, 2022. The debt aimed to cover the cost of establishing the company’s second production line.

The loan will also be used to cover a 16-installment loan worth SAR 87.8 million that started on Aug. 7, 2016 and was scheduled to end on May, 7 2020. It was used for covering Tabuk Cement’s share in the capital increase of the Industrialization & Energy Services Company (TAQA).

The company signed another three-year Islamic loan facility worth SAR 21 million with Albilad Bank to pay its belated dues to the companies that built the second production line. The loan will be repaid semi-annually from March 30, 2017 to March 29, 2017.

The deals were based on the expected cash flows, which may increase the cost of financing.