Emaar EC concludes partial transfer agreement between finance ministry, PIF for outstanding loan

Logo of King Abdullah Economic City

Emaar The Economic City (Emaar EC) announced the latest developments to conclude a share subscription agreement with the Public Investment Fund (PIF), the completion of which is subject to a number of conditions, including the transfer of part of the Ministry of Finance (MoF) loan to the sovereign wealth fund.

The company said in a statement to Tadawul that a partial transfer agreement was concluded between MoF and the PIF on March 20, 2021.

The novation was agreed upon and the entitlement of the novation amount to be due and payable on the date on which the company approves the novation and after obtaining extraordinary general assembly approval for the capital increase by way of capitalizing the amount in accordance with the terms and provisions of the subscription agreement

The approval of the company’s board of directors was issued on March 30, 2021, in relation to the novation from MoF to the PIF and its entitlement to be due and payable, provided that such approval will take effect on the effective date.

Emaar EC expects to complete the increase of the capital by way of converting the novation amount after the fulfilment of the conditions set out in the subscription agreement, including without limitation, obtaining official approvals as well as from the extraordinary general assembly.

The company will later announce any developments in this regard.

Upon the effective date, the novation will have a positive impact due to the decrease in the company’s financial charges as a result of the decrease in the loan amount.

According to the data compiled by Argaam, Emaar EC announced the conclusion of a share subscription agreement on Aug. 31, 2020, with the PIF.

At the time, discussions were going on between the MoF and the PIF with respect to novation of part of the loan due to MoF following the loan agreement on May 23, 2011, and amended on June 4, 2015, to PIF for a total amount of SAR 2.83 billion (the novation).