Al Akaria plans to reduce loans to SAR 3.2 bln by July-end: CEO

Saudi Real Estate Co. CEO Ibrahim Al Alwan

Saudi Real Estate Co. (Al Akaria) plans to reduce its loans from SAR 4.5 billion at the start of the year to SAR 3.2 billion by July-end, Al Arabiya TV reported, citing CEO Ibrahim Al Alwan.

The developer repaid a SAR 170 million loan from the Ministry of Finance, in addition to a SAR 535 million loan to Riyad Bank. In addition, it plans to repay a loan of 380 million to Bank AlJazira by next month.

Al Alwan stated that a total of SAR 1.2 billion will be repaid by July-end, which will contribute to reducing costs.

The repayment was planned as part of the recent capital hike’s utilization.

He said that the company’s board of directors considered capital and loan restructuring to achieve its strategic plans for the coming five years. Accordingly, the debt leverage level will be right to launch the upcoming projects.

This does not mean that the company will not borrow, but rather borrowing is part of its plan according to projects needs at the time, he said.

During the past three months, Al Akaria studied the impact of the current and future interest rates on the company’s operations.

Al Alwan indicated that ROSHN project is currently in the design phase, noting that implementation phase will begin by early 2023.

ROSHN reflects Al Akaria’s strategic plan to invest in the residential sector and its financial impact will reflect from start of Q1 2023.

According to data compiled by Argaam, Al Akaria signed a conditional purchase agreement with a development obligation with ROSHN Real Estate Co. worth SAR 141.98 million.

It involves 155 residential plots with a total area of 44,368 square meters within package K1 and K2 of SEDRA Community Masterplan.