Saudi Arabia’s ambitious economic development project, King Abdullah Economic City (KAEC), is undergoing a major financial overhaul.
Emaar the Economic City (EEC), the master developer of KAEC, has announced a comprehensive restructuring plan worth $2.3 billion. This strategic move aligns with Saudi Vision 2030, aiming to diversify the economy and reduce reliance on oil.
Key Components of the Plan
The Capital Optimisation Plan (COP) includes restructuring EEC’s $1 billion in bank debt facilities. This will help realign repayment schedules and support the company’s investment strategy. Additionally, $1.1 billion in debt owed to the Public Investment Fund (PIF) will convert into share capital. The COP also includes a new $267 million shareholder facility from PIF.
Focus on Long-Term Financial Stability
EEC will pursue a capital decrease to offset its accumulated losses. This move aims to strengthen the company’s financial position without affecting daily operations. The plan, developed after two years of analysis, aims to stabilize EEC’s financial platform and ensure long-term value creation.
Strengthening Partnerships and Stakeholders
The COP enhances EEC’s partnerships with key stakeholders, including PIF and Saudi banks such as Alinma Bank and Banque Saudi Fransi. Each component of the plan offers independent benefits, helping the company align its financial operations with its growth goals.
Prioritizing Key Sectors
EEC will focus on three main areas: industrial and logistics businesses, tourism, and residential real estate. For industrial businesses, the company plans to develop sector-specific facilities and services. In tourism, EEC aims to enhance visitor services and establish KAEC as a premier destination.
Residential Real Estate and Economic Zones
In real estate, EEC will offer diverse housing options for various segments, ensuring access to high-quality social infrastructure. The company also plans to upgrade and monetize current real estate inventory. For Special Economic Zone operations, EEC aims to attract more businesses by leveraging Industrial Valley tenants.
Future Growth and Strategic Vision
Chairman Fahad Al Saif emphasized that the COP enables EEC to capitalize on opportunities and align with Saudi Vision 2030. CEO Abdulaziz Ibrahim Alnowaiser highlighted the plan’s role in improving financial health and ensuring long-term sustainability.
Key projects at KAEC include the upcoming 45,000-seat King Abdullah Economic City Stadium, set to open by 2032. The stadium, inspired by Red Sea coral reefs, will host various events, including the FIFA World Cup 2034. Additionally, partnerships with hospitality groups will further enhance KAEC’s tourism appeal.
With these initiatives, EEC aims to solidify its position as a key player in Saudi Arabia’s Vision 2030. By focusing on strategic investments, the company is poised for sustainable growth across its industrial, tourism, and real estate sectors.
