MEFIC REIT freezes cash dividend for H1 2020 on tightened liquidity

15/10/2020 Argaam

MEFIC REIT Fund will withhold cash dividend for the period Jan. 1 - June 30, 2020, due to tightened liquidity, the fund manager, MEFIC Capital said in a bourse statement.

 

The company’s decision was driven by lower rental income and the termination of some rental contracts due to the Kingdom’s lockdown measures amid the COVID-19 fallout.

 

Additionally, the fund paid off some of its liabilities pertaining to some asset acquisitions to avoid being fined or incurring additional expenses that may weigh on its profitability.

 

It also rescheduled dues for those tenants in default, which will buoy cashflows onwards.

 

This came in line with the fund’s strategy to maintain creditors’ trust and to boost its financial position.

 

The dividend freeze decision will have an interim negative impact on unitholders, the statement added.

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