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Saudi Jabal Omar rights issue partly to pay back loan

Proceeds to partly pay back $93.3 mln loan – prospectus; Capital to increase to 9.3 bln riyals after issue; Proceeds to be also used to finance Mecca project

May 30, 2011 3:20 by

Saudi developer Jabal Omar will use part of the proceeds from a rights issue to pay back a 350 million riyals ($93.33 million) bridge loan from Al-Rajhi Bank, it said in a prospectus.

Jabal Omar said on Sunday its shareholders approved a 38.4 percent capital increase to 9.3 billion riyals ($2.48 billion) through a rights issue.

The prospectus, posted on the Capital Markets Authority website, said the proceeds would also be used to finish the first phase and start the second phase of building a project close to the Grand Mosque in Mecca, Islam’s holiest city.

It said the rights issue dates would be from June 6 to June 15. No further details of the Al-Rajhi loan was provided in the prospectus.

The prospectus also said the largest part of the cost of the first phase will be financed through a syndicated loan from local banks worth up to 5 billion riyals.

In October, the developer secured a 1.35 billion riyals bridge loan from local banks and said it would finance it through the 5 billion riyals syndicated loan.

The project in Mecca will include luxury hotels, shops and houses.

The developer sought shareholders’ approval last year for a change in its basic charter that would allow it to borrow more.

Last week, Saudi developer Emaar Economic City received a 5 billion Saudi riyals loan ($1.33 billion) from the kingdom’s finance ministry to speed up construction of a project.

Jabal Omar’s shares were down 1.6 percent at 1011 GMT, underperforming the kingdom’s bourse  which eased 0.4 percent. (Reporting by Marwa Rashad and Jason Benham; Editing by Dinesh Nair)

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