13 Nov, 2022
Description of the Event:
Musharaka Capital announces as the Fund Manager of Musharaka REIT the signing of the Sharia compliant banking facilities agreement with Al Jazira Bank for a maximum of SR 1,000,000,000 for a period of seven years. The banking facilities will be paid off at the end of the seventh year. The banking facilities will be obtained by mortgaging part of the real estate assets of the Fund and issuing of a promissory note. The Fund Manager intends to refinance part of the currently withdrawn facilities.
The Impact Caused by the Event:
By obtaining this facility, the Fund aims to be in a better position to achieve its investment objectives in line with the Fund's strategy and manage risks in an optimal fashion. The Fund Manager expects a positive impact in general on the performance and results of the Fund, by diversifying the sources of financing. The new facility is expected to reduce the Fund’s debt coverage ratio, the minimum interest coverage ratio, and increase the upper limit of the financial leverage ratio, which will place the Fund in a stronger position to achieve its strategy and objectives and further support the Fund in the acquisition of income-generating real estate assets that will benefit the Fund and it’s unitholders.