ADES’ backlog exceeds SAR 27B: CEO

Mohamed Abdul Khaleq, CEO of ADES Holding Co.

ADES Holding Co. has a backlog worth more than SAR 27 billion, CEO Mohamed Abdul Khaleq told Argaam in an interview.

He also said that the additional joint credit facility agreement of SAR 11.3 billion signed by the company will provide competitive interest rates, which is currently considered the best among the market.

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ADES provided its current contracts and backlog as guarantees in exchange for this financing. This is what the company often does to obtain funds, being deemed a smart way to invest as the cash flow of these contracts covers the repayment of debts and borrowing costs.

The CEO stated that 38% of the total financing value was in US dollars, while the remaining 62% was in Saudi riyals.

As for the company’s income sources, a total of 70% is derived from Saudi Aramco, Abdul Khaleq highlighted, pointing out that income diversification is part of the company's plans.

ADES aims to constitute 50% of its income from abroad in US dollars.

Accordingly, the company is working on diversifying its revenue sources. This is through heavyweight local and international oil companies.

The global oil and gas sector witnessed historic levels of merger and acquisition (M&A) activity in H1 2024, valued at $140 billion, compared to the average for past years of between $60 and $70 billion.

Thus, ADES is currently looking for M&A opportunities, especially those considered cash flow generators.

The CEO saw that ADES was quick to employ three out of five drilling rigs that were recently halted, with an eye to sign contracts for the other two rigs before 2024-end.

According to data compiled by Argaam, ADES successfully upsized its outstanding syndicated facility, securing an additional $3 billion (SAR 11.3 billion), with the majority of lenders participating, along with new local and regional financing entities.