DUBAI (Reuters) – Jabal Omar Development Company, one of Saudi Arabia’s largest listed property developers, has secured 1.6 billion riyals ($427 million) in loans from Banque Saudi Fransi backed by a guarantee from the Department of Finance, he said in a stock exchange filing.
The company, which posted five consecutive quarterly losses at the end of September 2020, operates the Jabal Omar complex of hotels and residential and commercial properties within walking distance of the Grand Mosque in the Muslim holy city of Mecca.
The 15-year credit facilities, signed on March 8, will be used to complete work on the third phase of the Jabal Omar project, which includes four 2,160-room towers and a total retail area of 26,435 square meters. .
He said the guarantee was issued “after agreeing on a number of representations and guarantees” with the ministry.
The development of religious Hajj and Umrah pilgrimages, which attracted millions of worshipers from around the world every year before the pandemic, is part of the government’s Vision 2030, a program that aims to wean the economy from dependence on oil. .
Pilgrimages, which generated billions of dollars each year before the pandemic, were drastically reduced last year to prevent the spread of the coronavirus.
“Jabal Omar has been hit hard by the COVID-19 lockdown in Makkah,” a source familiar with the matter said, saying the guarantee would back the lead developer of the Makkah complex.
The finance ministry told Reuters in a statement that the project “is of strategic importance” and that is why the ministry was offering support and had already loaned money to the developer.
King Salman this week endorsed initiatives aimed at mitigating the financial impact of the pandemic on the sector that supports pilgrimages.
Jabal Omar announced in May that he would stop 270 million riyals in rents on three hotels and a shopping center bought by Alinma Makkah Real Estate Fund in 2017 and which Jabal Omar subsequently rented and operated, after revenues fell.
($1 = 3.7514 riyals)
Reporting by Marwa Rashad in London and Yousef Saba, Saeed Azhar and Davide Barbuscia in Dubai; Editing by Louise Heavens and Edmund Blair