Al-Khodari refinances Islamic loans

10 May 2015

Saudi conglomerate signs deals with four banks

  • Saudi Al-Khodari Sons Company refinanced SR1.5bn ($403.7m) of Islamic loans
  • It secured a new Islamic loan from the Abu Dhabi Commerical Bank worth AED225m ($61.3m)
  • Al-Khodary Sons is planning an expansion after winning over SR2bn of contracts since December 2014

Saudi Arabia’s Abdullah A.M. al-Khodari Sons Company has refinanced SR1.5bn ($403.7) of Islamic loans from three banks.

It also secured new financing from the UAE’s Abu Dhabi Commercial Bank (ADCB) worth AED225m ($61.3m).

The ijarah (Islamic loan based on an asset) term finance tenor is 36 months. The credit agreement expires on 31 March 2016 and may be renewed.

Al-Khodari Group renewed existing Islamic credit facilities with local Samba Financial Group, worth SR379m. The credit agreement will expire on 30 November 2015, but the credit limits for the projects will mature over the life of the projects, or three to five years.

In March, the company renewed its Islamic credit facilities with local Saudi Hollandi Bank worth SR853m. It expires at the end of 2015, but credits will mature over three-year project lifetimes.

It also renewed Islamic credit facilities with local National Commercial Bank worth SR282m. It will expire on 30 September 2015 with similar terms.

The company made a net profit of SR14m in the first quarter of 2015, down 57 per cent year on year.

It is planning to use the funds to support the expansion of its business, including specific projects.

The Al-Khodari company has won significant projects since late 2014 including:

  • King Khaled faculty housing project in Faraa (SAR1.35bn)
  • Well field package in Waad al-Shamal ($170m)
  • Maternity and paternity hospital in Rass (SAR313.2m)
  • Waste collection and disposal in Jizan (SAR119m)
  • Waste collection and disposal in al-Hada and al-Shafa (SAR99.5m)

The company announced plans to raise its capital by SR500m ($133m) through a rights issue in November 2014, but has not yet done so. Local GIB Capital has been appointed to manage the rights issue.

Al-Khodari is a long-standing Saudi firm active in the market since the 1960s. It floated 30 per cent of its shares on the Tadawul in 2010.

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