Introduction :Mulkia Investment Company would like to announce signing an Islamic Shariah compliant financing agreement with Alrajhi bank.
Description of the Event :
Mulkia Investment Company, in its capacity as Fund Manager of Mulkia Gulf Real Estate REIT Fund (“the Fund”), announces that a facility agreement has been signed with Al-Rajhi Bank with the aim of reducing financing costs and extending the loan term for the benefit of the unit holders. More details as follow:
Limit of withdrawable facilities: 600 million Saudi riyals.
Duration: Seven years.
Use of the facilities: The facilities will be used to pay outstanding facilities withdrawn from Bank Albilad an amount of 342.6 million Saudi riyals, the remaining amount of the facilities will be used in acquiring additional real estate assets for the fund.
Method of repayment: Finance costs are paid every six months, and the principle of the loan will be paid as a bullet payment at the end of the agreement period. Work will be done to extend the agreement within a sufficient time before the end of the agreement period.
Guarantees: Mortgage of real estate assets equivalent to 200% of the value of the withdrawn facilities for Al-Rajhi Bank, in addition to providing promissory notes for the bank.
Agreement start date: 29/12/2020 AD
Related parties: None.
The Impact Caused by the Event :
As a result of obtaining better conditions in terms of profit margin and administrative fees in the agreement signed with Al-Rajhi Bank, it will be reflected in savings in annual profit margin on financing for the benefit of the fund. Also, increasing the financing term for a period of seven years will positively affect the duration of the fund’s obligations.
Additional Information :
Mulkia Investment Company confirms that the fund will not be charged the financing structuring fee stipulated in the terms and conditions of the fund for the part that has been refinanced amounting to 342.6 million Saudi riyals.