Saudi Arabia’s Jabal Omar Development Company has secured a SAR4 billion ($1.07 billion) loan to refinance part of an existing facility it signed in 2012 to fund its real estate project in Mecca, it said on Tuesday.
Saudi Arabia’s largest listed developer by market value said the new loan from National Commercial Bank, to fund the project’s first phase, will be stretched over a period of 15 years, instead of the eight years of the previous facility.
It did not give the details of the previous loan but said it was signed with six banks in June 2012.
Several companies in the Gulf have come to the loan market in recent months to refinance existing loans at more favourable borrowing rates as cash-rich local banks compete for deals.
The company is building a number of hotels in the holy city as it taps into demand from growing inflows of Islamic pilgrims.
Jabal Omar said it will repay the loan from the expected revenue of five hotels as well as revenue from leasing shops and selling some residential units in the project’s first phase. Repayment would start in September 2017, it said.
In November, the company reported its first quarterly profit since 2009, earning SAR431.3 million in the fourth quarter of the Hijri calendar, which it follows in preparing its financial statements.