NCLE subsidiary terminates building lease contract with Yamami Holdings

National Company for Learning & Education’s (NCLE) board of directors approved the cancelation of the lease agreement of an educational complex between Al-Ghad National Schools Co., a wholly-owned subsidiary, and Yamami Holdings, a related party, according to a bourse filing.

The parties agreed to terminate the 25-year deal, worth SAR 195 million, today, June 30, 2020, with the building’s ownership transferred to the new owner. In addition, the companies signed a lease agreement with the new owner. 

In a separate statement, NCLE announced that Al-Ghad National Schools signed a lease agreement on June 29, 2020, with Roboua’ Altaleem Real Estate Company to lease an educational complex building in Riyadh.

The 10-year deal is valued at SAR 63.7 million, which will be paid in annual payments starting July 1, 2020.

The deal will be automatically renewed for another three 5-year periods (total 15 years), in addition to the binding 10 years.

A total of SAR 36.7 million for 5 years will be paid in case of the first renewal cancellation right is not executed, which will be paid in annual payments. This will be followed by SAR 40.4 million and SAR 43.6 million yearly payments for the second and third extensions.

The complex is built over an area of 11,283 square meters, with a total build-up area of 17,908 square meters.

NCLE will act as a guarantor to Al-Ghad National Schools Co., in case of default in the due rental payments. The guarantee is subject to the percentage of the ownership of the NCLE at the capital of Al-Ghad National Schools Co.

In addition, NCLE will provide promissory notes for Roboua’ Altaleem Real Estate Co. continuously for the coming 5 years payments on a rolling basis.

The financial impact of the new contract will be reflected on the company’s Q4 2020 financials, ending August 31, 2020, the statement noted.