Saudi pilgrimage sites developer Jabal Omar restructures loan

Jabal Omar Development Company, one of Saudi Arabia’s largest-listed property developers, said on Tuesday it had signed a deal to restructure a 4.7 billion-riyal ($1.25 billion) loan agreed in 2015, including by increasing it and extending the maturity.

The facility, provided by Saudi British Bank (SABB) and Samba Financial Group, will have a draw limit of 5.9 billion riyals, around a quarter more than its original size and repayments will begin after a three-year grace period, Jabal Omar said in an exchange filing.

The company, which made eight consecutive quarterly losses before turning a 270.6 million riyals profit in the quarter ended June, is developing projects of “strategic importance,” Saudi Arabia’s finance ministry has told Reuters.

Samba is now Saudi National Bank (SNB) after its merger with National Commercial Bank. The chairman of Jabal Omar’s board, Saeed Alghamdi, is the CEO of SNB.

The loan’s maturity will be extended by three years to 2030, with an option for another three-year extension if preconditions are met.

The original agreement, signed in March 2015, was for 12 years.

The company said the restructuring was needed to complete Phases 2 & 4 of the Jabal Omar Project and improve the terms in line with the company’s cash flows and capital structure.

It said there was an option to reduce the loan’s future rate depending on progress made on the phases and in deleveraging.

The company operates the Jabal Omar complex of hotels and residential and commercial property within walking distance of the Grand Mosque in the Muslim holy city of Mecca.

It was hard-hit when the pandemic reduced pilgrimages.

Developing religious pilgrimages, which before the pandemic drew millions of Muslims from around the world each year, is part of the government’s Vision 2030 to diversify the economy and reduce reliance on oil.

In March, the company secured 1.6 billion riyals in financing backed by a finance ministry guarantee.