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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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IMF: Pakistan Wins More Financing Assurances from Saudi Arabia, UAE, China

Pakistan’s Prime Minister Shehbaz Sharif (Asharq Al-Awsat)
Pakistan’s Prime Minister Shehbaz Sharif (Asharq Al-Awsat)
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IMF: Pakistan Wins More Financing Assurances from Saudi Arabia, UAE, China

Pakistan’s Prime Minister Shehbaz Sharif (Asharq Al-Awsat)
Pakistan’s Prime Minister Shehbaz Sharif (Asharq Al-Awsat)

Pakistan has received “significant financing assurances” from China, Saudi Arabia and the United Arab Emirates linked to a new International Monetary Fund (IMF) program that go beyond a deal to roll over $12 billion in bilateral loans owed to them by Islamabad, IMF Pakistan Mission Chief Nathan Porter said on Thursday.

Porter declined to provide details of additional financing amounts committed by the three countries but said they would come on top of the debt rollover.

The IMF's Executive Board on Wednesday approved a new $7 billion loan for cash-strapped Pakistan, more than two months after the two sides said they had reached an agreement.

The loan — which Islamabad will receive in installments over 37 months — is aimed at boosting Pakistan's ailing economy.

“I won't go into the specifics, but UAE, China and the Kingdom of Saudi Arabia all provided significant financing assurances joined up in this program,” Porter told reporters on a conference call.

The global lender said its immediate disbursement will be about $1 billion.

In a statement issued Thursday, the IMF praised Pakistan for taking key steps to restore economic stability. Growth has rebounded, inflation has fallen to single digits, and a calm foreign exchange market have allowed the rebuilding of reserve buffers.

But it also criticized authorities. The IMF warned that, despite the progress, Pakistan’s vulnerabilities and structural challenges remained formidable.

It said a difficult business environment, weak governance, and an outsized role of the state hindered investment, while the tax base remained too narrow.

“Spending on health and education has been insufficient to tackle persistent poverty, and inadequate infrastructure investment has limited economic potential and left Pakistan vulnerable to the impact of climate change,” it warned.

Prime Minister Shehbaz Sharif in a statement hailed the deal that his team had been negotiating with the IMF since June.

Sharif, on the sidelines of the United Nations General Assembly, told Pakistani media that the country had fulfilled all of the lender’s conditions, with help from China and Saudi Arabia.

“Without their support, this would not have been possible,” he said, without elaborating on what assistance Beijing and Riyadh had provided to get the deal over the line.

The Pakistani government has vowed to increase its tax intake, in line with IMF requirements, despite protests in recent months by retailers and some opposition parties over the new tax scheme and high electricity rates.

Pakistan for decades has been relying on IMF loans to meet its economic needs.

The latest economic crisis has been the most prolonged and has seen Pakistan facing its highest-ever inflation, pushing the country to the brink of a sovereign default last summer before an IMF bailout.

Inflation has since tempered, and credit ratings agency Moody’s has upgraded Pakistan’s local and foreign currency issuer and senior unsecured debt ratings to “Caa2” from “Caa3”, citing improving macroeconomic conditions and moderately better government liquidity and external positions.