JAZADCO receives final warning for RESRECO's SAR 100.8M loan guarantee

Logo of Jazan Development and Investment Co. (JAZADCO)

Jazan Development and Investment Co. (JAZADCO) received an official final warning from the Saudi Industrial Development Fund (SIDF), on Jan. 26, regarding its guarantee obligation for a loan to Al-Reef Sugar Refinery Co. (RESRECO).

The loan of SAR 100.8 million must be paid within a maximum period of 15 working days from the notice date, as stipulated in Article (14) of the State Revenue Law, according to a Tadawul statement.

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JAZADCO’s share of the SAR 672 million loan amounts to 15%.

The company also confirmed that work is underway with RESRECO management to complete the previously announced procedures, which are as follows:

Fair Valuation Request: JAZADCO formally requested RESRECO’s board to conduct a fair and independent valuation of the company’s assets. Additionally, JAZADCO supports efforts to identify potential buyers for the company’s assets to mitigate financial exposure.

Negotiations: A meeting was held with SIDF to explain the situation in full and explore a structured and mutually agreeable payment plan to fulfill its guarantee obligation. Another meeting was scheduled with the SIDF to review the developments.

Financial Impact Assessment: JAZADCO is assessing the financial impact of this obligation. The impact on the financial statements will be disclosed immediately after the above procedures are applied, as this impact is linked to the asset valuation being worked on.

The company will announce any developments in this regard in due course.

According to data available with Argaam, JAZADCO and ARTEX Industrial Investment received, on Nov. 17, 2024, official notices from SIDF concerning their guarantee obligations related to the loan agreement granted to RESRECO.