SEDCO Capital completes negotiations with Al Rajhi Bank to reduce annual financing fees

SEDCO Capital, the fund manager for SEDCO Capital REIT Fund, successfully completed the negotiations with its strategic partner Al Rajhi Bank to reduce the annual financing fees.

The fund manager said in a bourse statement today that the financing fee has been reduced by 45 basis points with the transition in SAIBOR from annual to semi-annual and no change in the rest of the contract terms.

SEDCO Capital is further exploring the possibility of entering into a hedging contract to stabilize the price of SAIBOR and benefit from the current price drop, the statement said.

The initiative will contribute towards the improvement of the fund’s operational performance and preserve the interests of the unit holders, it further added.

According to data compiled by Argaam, in April 2018, SEDCO Capital REIT signed a 5-year financing contract worth SAR 600 million with Al Rajhi Bank to maximize its revenue targets and achieve the fund’s objectives.

Under the contract, the funding will be withdrawn within 18 months and re-paid at the end of the 5 years, during which the cost of finance will only be reimbursed.