Yamama Cement signs SAR1.633bn financing agreement

Yamama Cement Co signed a Shariah-compliant financing agreement  on 31 March for SAR1.663bn (US$435.4m) with Saudi National Bank, the cement producer said in a statement to the Tadawul. 

The agreement covers long-term financing of SAR800m, for a period of eight years (including three years of grace period), and refinancing part of the existing long-term loans amounting to SAR563m, for a period of four years to repay part of existing loans.

It also includes short-term financing of SAR300m, for a period of one year (revolving loan on demand). The financing agreement is guaranteed by promissory note, the statement noted. The long-term loan is aimed towards financing the transfer and installation of the seventh line from the old plant in south Riyadh to the new plant’s location in Al-Kharj governorate. The production capacity of the line is 10,000tpd of clinker. By the end of 2024, the clinker production capacity at the new site is expected to reach 30,000tpd.

The long-term loan also aims to repay a part of existing loan obligation, and improve financial efficiency. The purpose of the short term loan is to finance the working capital.