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Emaar The Economic City Submits Capital Cut Request to CMA

Emaar The Economic City is tasked with developing King Abdullah Economic City (official website)
Emaar The Economic City is tasked with developing King Abdullah Economic City (official website)
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Emaar The Economic City Submits Capital Cut Request to CMA

Emaar The Economic City is tasked with developing King Abdullah Economic City (official website)
Emaar The Economic City is tasked with developing King Abdullah Economic City (official website)

Saudi Arabia’s Emaar The Economic City (EEC) said on Sunday it submitted an application to the Capital Market Authority (CMA) to lower its capital, based on the recommendations of its Board of Directors.
In a statement to Tadawul, the company said that the proposed capital decrease is one component of its recently announced capital optimization plan, 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 request stipulates reducing the capital from 11.33 billion riyals to 5.7 billion riyals, by canceling 563.116 million shares of the company’s shares, representing a value of 5.6 billion riyals.
The company is responsible for master planning the entire King Abdullah Economic City.
Key points of the restructuring plan include:
On September 5, the Saudi Ministry of Finance transferred the remaining 2.9 billion riyals of a loan from Emaar The Economic City to the Public Investment Fund (PIF).
Emaar The Economic City (EEC) has signed a non-binding agreement with PIF for a potential new loan of up to 1 billion riyals ($266 million).
The company, the ministry, and PIF have agreed to transfer existing mortgages from the ministry to PIF, eliminating any debt owed to the ministry.
In September 2021, PIF acquired a 25% stake in Emaar The Economic City by converting part of a 2.8 billion riyal loan into shares.
The Ministry of Finance agreed to extend the loan's grace period by one year, to June 2025, and to add 192 million riyals in interest for 2024 to the loan.
The board recommended reducing the company’s capital by 5.63 billion riyals by canceling 563 million shares to cover losses. It also suggested increasing capital by converting 3.97 billion riyals of debt into new shares.
The company has also signed agreements to reschedule loans with several banks, totaling 3.47 billion riyals, and secure additional credit of 301.5 million riyals.

 

 

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Saudi Arabia's Digital Advertising Boom: Addressing Economic Leakage, Boosting Local Content

A digital advertising event recently held in Riyadh (Asharq Al-Awsat)
A digital advertising event recently held in Riyadh (Asharq Al-Awsat)
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Saudi Arabia's Digital Advertising Boom: Addressing Economic Leakage, Boosting Local Content

A digital advertising event recently held in Riyadh (Asharq Al-Awsat)
A digital advertising event recently held in Riyadh (Asharq Al-Awsat)

Saudi Arabia’s digital advertising sector is experiencing rapid growth, but a significant portion of its revenues is leaking to foreign platforms. To maximize the impact on the national economy, experts are calling for strategies to curb this outflow and redirect it to local channels.

The importance of retaining digital ad revenues lies in the substantial size of this market. It is estimated that approximately $1 billion in ad spent is lost annually to foreign platforms, representing a considerable loss to Saudi Arabia’s economy.

Dr. Ebada Al-Abbad, CEO of Marketing and Communications at Tadafuq, a Saudi digital advertising network, told Asharq Al-Awsat that the problem stems from the fact that although advertisers, products, and audiences are often local, the largest share of financial gains goes to foreign platforms. He estimated that 70-80% of the $1.5 billion spent on digital advertising in Saudi Arabia in 2022 went to global platforms such as Google and Facebook. This results in the national economy losing nearly $1 billion annually from this sector alone.

Al-Abbad noted that government agencies in Saudi Arabia also contribute to the outflow. He explained that public sector spending on digital advertising, intended to raise awareness among citizens and residents, frequently ends up on foreign platforms. Government spending makes up about 20-25% of the total digital ad market in the Kingdom, meaning hundreds of millions of riyals leave the country annually, weakening the local digital economy.

Al-Abbad argues that Saudi Arabia needs strong local digital ad networks to keep this revenue within the national economy. These networks would help create jobs, drive innovation, and promote cultural diversity in digital content. Developing local platforms would also enhance Saudi Arabia’s digital sovereignty by ensuring that data remains within the country and is not controlled by foreign entities.

Moreover, local networks would reduce dependence on international platforms, ensuring that the economic benefits of digital advertising remain in the Kingdom, he said, stressing that this would align with Saudi Arabia’s broader Vision 2030 goals, which emphasize building a robust, diversified economy driven by local industries and digital transformation.

Globally, the digital advertising sector is growing rapidly. In 2022, worldwide spending on digital ads reached $602 billion, and it is projected to hit $876 billion by 2026. In the Middle East and North Africa (MENA) region, the digital ad market grew to $5.9 billion in 2022, with Saudi Arabia’s market accounting for over $1.5 billion.

In other countries, the digital ad sector plays a crucial role in boosting national economies. For example, in the United States, the digital advertising industry contributed $460 billion to the GDP in 2021, about 2.1% of the total. In the UK, the sector accounted for 1.8% of GDP in 2022. This shows how important digital advertising can be in driving economic growth.

One of the key challenges facing Saudi Arabia’s digital ad sector is the dominance of global platforms like Google and Facebook, which control 60% of the global digital ad market, Al-Abbad told Asharq Al-Awsat. This dominance results in a significant outflow of revenue and allows these platforms to control digital data and content. He warned that this could undermine Saudi Arabia’s national sovereignty over its digital economy.

To counter this, he emphasized that Saudi Arabia needs to build competitive local networks that can retain a larger share of the market. This will not only keep more revenue in the country but also strengthen the Kingdom’s control over its digital data and content.