SISCO's financial solvency 'very high', initial financing agreements for sewage projects 'ready': CEO

SISCO CEO Mohammed Al-Mudarres

Saudi Industrial Services Co. (SISCO) and its subsidiary, International Water Distribution Co. (TAWZEA), enjoy "very high" financial solvency, CNBC Arabia reported, citing CEO Mohammed Al-Mudarres. 

The company is currently in the process of completing the final legal procedures to sign the financing contracts related to Al Madinah, Buraydah and Tabuk sewage treatment projects. 

The initial agreements to finance the projects are ready, Al-Mudarres said, adding that there will be some details after the consortium wins the projects as the initial agreements will then be activated. 

The Tadawul-listed company chose the best financing offer after evaluating several bids submitted by a group of banks. 

Ater signing the contract, SISCO will negotiate with the banks to complete the financing details, get the necessary guarantees, as well as sign some consulting and operational contracts, the CEO said. 

All the company’s segments are witnessing the development of various projects inside and outside the Kingdom. The impact of the Taif wastewater treatment plant, on which the company started work this year, will be reflected on the financials by next year’s end and early-2023, the CEO said. 

Commenting on the distribution of returns from the projects, Al-Mudarres said that 50% of the financial impact generated by TAWZEA will go to SISCO. 

He noted that project financing has nothing to do with dividend payout, as the distribution is related to the revenues generated from different segments and approved by the board of directors at the end of each year. 

Saudi Arabian Amiantit Co. and SISCO said the consortium, to which their equally-owned subsidiary, International Water Distribution Co. (TAWZEA) is a party, signed, on Sept. 26, a contract with Saudi Water Partnership Co. (SWPC) to build Buraydah 2, Tabuk 2 and Al Madinah 3 independent sewage treatment plants (ISTPs). 

TAWZEA will hold a 35% stake in the project, while Spain’s Acciona and Tamasuk will own 35% and 30%, respectively. 

Al-Mudarres earlier said the cost of constructing the Al Madinah, Buraydah and Tabuk projects will amount to nearly SAR 3 billion and will be 80% financed by local banks and 20% from the company’s resources.