Emaar the Economic City Company announced that the Saudi Public Investment Fund will own a 25% stake in the company, after it issued 283.3 million new ordinary shares in exchange for transferring the debt owed by the company to the fund, amounting to about 2.8 billion riyals, as the latter paid the Saudi Ministry of Finance a loan on behalf of company.

“Emaar the Economic City” clarified in a disclosure to the Saudi Stock Exchange (Tadawul) that under the move, the company will have a debt of 2.833 billion riyals ($755.39 million) in favor of the Saudi Sovereign Fund instead of the Ministry of Finance, after increasing the capital through debt transfer.

Major shareholder

The new shares issued by the company in favor of the fund will have a nominal value of 10 riyals per share, i.e. a discount of 21% on the closing price of the share today, Thursday, at 12.64 riyals.

The deal will make the Saudi Public Investment Fund the largest shareholder in Emaar the Economic City, as the largest current investor, Diem Modern Real Estate Management, had a 16.78% stake in the company before the debt conversion, and his share after the conversion process became 12.59%.

Saudi Fransi Capital acted as the financial advisor for the transaction.

It is noteworthy that “Emaar The Economic City” is linked to Emaar Real Estate Development Company, based in Dubai, and is working on the development of King Abdullah Economic City in Rabigh, Saudi Arabia.