Emaar EC amends plan to raise capital by converting PIF debt to new shares

Emaar The Economic City’s (Emaar EC) board of directors amended on March 8 an earlier recommendation to increase capital by converting the debt owed to the Public Investment Fund (PIF) into new ordinary shares.

The board proposed increasing the amount of debt to be converted from SAR 3.97 billion to SAR 4.11 billion, in order to include all interest, commissions and fees until Dec. 31, 2024, the developer said in a statement to Tadawul.

The company also entered into an addendum to the conversion agreement on March 9 to reflect this increase and agree to the conversion mechanics.

Emaar EC will include all relevant details in its shareholders’ circular, which will be published after obtaining the approvals of the Capital Market Authority (CMA) and the Saudi Exchange (Tadawul).

The debt conversion is subject to shareholders’ approval, and the company will invite the general assembly after obtaining the relevant regulatory approvals, the statement added.

The proposed debt conversion is one component of the company’s capital optimization plan announced on Sept. 8, 2024, designed to stabilize the company’s financial and operational positions and optimize its capital structure to enhance its ability to move forward with its growth plans, the company further indicated.

PIF is related party, as it is one of the Emaar EC’s substantial shareholders, the developer noted, adding that it will announce material developments as they occur.

According to data compiled by Argaam, Emaar EC’s board of directors recommended increasing capital through converting the PIF's SAR 3.97 billion debt to new ordinary shares.

This includes the liabilities and financial obligations owed to the fund under the shareholder loan agreement dated Feb. 19, 2023, and the debt novated from the Ministry of Finance (MoF) to the PIF on Sept. 5, 2024. The company also signed the related conversion agreement with the PIF on Sept. 7, 2024.