According to Arab Net, Emaar Economic City, has announced the recommendation of its Board of Directors, an increase in the company's capital by transferring debt, which will be in the company's overall investment fund and its total value of SR 2.83 billion.
The company said in a previous statement, which aims to transfer religion to improve the status of liquidity ratios and credit, and improve its capacity to achieve its growth goals.
She explained that the capital increase would not result in any obligations or financial contributions to the shareholders.
Emaar al-Madinah announced the appointment of Saudi Fransi Capital, financial advisor, and submitting a request for capital increase through debt conversion to the Capital Market Authority.
The company had reached an agreement to convert part of its debt to the Ministry of Finance to a share of the Company's Public Investments Fund, reducing company liabilities for approximately 27%.
Emaar obtained the economic city on the Ministry of Finance's loan in 2011 and was worth 5 billion riyals.
The loan was supposed to be repaid in 2015, but the allowance period for payment has been extended for additional five years until 2020 and 2026.
Under the Convention, SR 2.8 million will be transferred from the total loan to the General Investment Fund.
Emaar Economic City's capital will be increased by 283 million shares for the Fund at a nominal value of 10 riyals per share.
If this fund will be 15% of the company,
This process will solve the problem between traded liabilities and traded assets, which have exceeded 3.1 billion by the end of the first half, so the liabilities will fall by about 60% of 4.7 billion riyals, while shareholders' equity will be strengthened by 43%.
The company's accumulated losses will be reduced to 17% of the capital, compared with more than 22% by the end of the first half of the year.
The deal enters into force after obtaining the necessary approvals, as well as the approval of the Extraordinary General Assembly to increase capital.
