Eastern Cement secures SAR 850M facility from SNB

Logo of Eastern Province Cement Co. (Eastern Cement)

Eastern Province Cement Co. (Eastern Cement) signed a Shariah-compliant credit facility agreement worth SAR 850 million with Saudi National Bank (SNB), according to a statement to Tadawul.

The company explained that the facility aims to finance the construction of a new production line at its plant, with a capacity of 10,000 tons per day, at a total cost of SAR 1.01 billion. Additionally, the funds will support the company’s working capital.

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The financing has a tenure of nine years, with guarantees including a promissory note and a commitment by Eastern Cement to assign the insurance policies of the new production line project to the bank upon completion. The company also pledged to mortgage the equipment and machinery related to the new production line in favor of the bank once the project is finalized.

Eastern Cement noted that the SAR 850 million represents the maximum amount available to it for financing and various banking services. It will draw on the facility as needed, having secured the loan at competitive terms and rates. It added that there are no related parties involved in the deal.

According to data from Argaam, Eastern Cement awarded the contract for the construction of the new 10,000-ton-per-day production line to China's Sinoma CDI in January. The contract is valued at $270.53 million (SAR 1.01 billion).

In March, the company also secured a SAR 1 billion facility from Banque Saudi Fransi to fund the new production line and provide working capital support.