Chemanol to repay SAR 273 mln loans, expects SAR 4.5 mln drop in financial costs this year

Logo of Chemanol

Methanol Chemicals Co. (Chemanol) will repay this week SAR 122 million to the Saudi Industrial Development Fund (SIDF), which represents 50% of its outstanding loan. It will also make an early repayment of SAR 151 million, to the lending banks, which represents 35% of its outstanding loan.  

These payments will have a positive impact on the current ratio, which stood at 1.98 in Q1 2022, and is expected to exceed 2.1, Chemanol said in a statement to Tadawul.  

Moreover, the debt-to-equity ratio will drop from 0.6 in the first quarter of the year to less than 0.34 after the abovementioned repayments. This will in turn reflects the company’s healthy financial position. Methanol added that it expects a decline of nearly SAR 4.5 million in financial costs during the year. 

The move was taken by Chemanol to enhance its financial efficiency and reduce finance costs, in line with its vision. Chemanol’s loan with SIDF will stand at SAR 123 million, while its outstanding loans to banks will reach SAR 277 million, the company explained, adding this will not affect the loan term based on the announced rescheduling.

On Feb. 25, 2021, Chemanol signed an agreement with a consortium of local banks to restructure outstanding loans worth SAR 475 million, Argaam earlier reported.

The agreement was signed with Gulf International Bank (GIB), Saudi British Bank (SABB), Riyad Bank, and Samba Financial Group (Samba). Under the agreement, the repayment period was extended by six years to 2028.