Guildhall Curated News –
Azmeel’s liquidity crunch came to a head in 2019 when clients, some government-related entities and some in the private sector, made late payments, Ashour said.
“The company is probably going to be looking at a model where they maintain project management and technical capabilities in-house and outsource and sub-contract as much as they can.”
The debt comprises 5.4 billion riyals in bank debt – of which 2 billion riyals are unfunded bank guarantees, 2.1 billion riyals in claims from trade creditors and 230 million riyals in employee and government dues.
The sukuk, for which a profit rate has yet to be determined, are expected early in the second quarter, Ashour said. Azmeel is in talks with Saudi lenders to arrange the deal.
The company envisions repaying the sukuk over 11 years, including a one-year grace period. About half of the planned sukuk will have personal guarantees.
“A cash sweep mechanism allows for excess cash to be used for earlier repayment,” Ashour said, meaning any potential upside in the business could accelerate the timeline.
Guildhall Curated News – Advertisement
This advertisement has not loaded yet, but your article continues below.
King & Spalding advised Azmeel and Latham & Watkins advised the creditors on the restructuring.
“This will save jobs and will increase economic asset recovery for banks and shareholders. It’s a win-win,” Ashour said.