Al Kathiri says sukuk offer 8.5% return, highest among local issuances

Logo of Al Kathiri Holding Co. 

Al Kathiri Holding Co. said that its issued sukuk offer an annual return of 8.5%, which is the highest among issuances of companies listed on the Saudi Exchange (Tadawul).

The sukuk will be listed and traded on Tadawul after the end of the subscription period, said the company said, adding that it pays zakat for the sukuk.

The company announced on March 12, starting the offering period for the first series of SAR-denominated sukuk, which will run until March 23, 2023.

CEO Meshal Alkathiri told Argaam earlier that the firm will invest 60% of the first tranche proceeds in the real estate sector. Noting that the company owns a building technology factory, the CEO said, "We will make use of the company's production capacity to support the reduction of construction costs by 25-30%, which will help us offer low-cost housing products."

He added that 40% of the first tranche proceeds will be used to support the company's core segments, concrete and transportation, which will help the firm reach its targets at the earliest.

The CEO referred to Al Kathiri's ability to use the offering proceeds in projects that will generate revenues and profits exceeding the cost of sukuk. This will also boost the company's resilience to pay the sukuk expenses and capital at the end of the period.

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