Saudi Arabia's Public Investment Fund (PIF) acquired a 25 percent stake in the Emaar Economic City (EEC) on Monday.
The PIF and Emaar announced the completion of the transaction; through which PIF will become a major shareholder in EEC with a 25 percent stake. The transaction was completed after obtaining required regulatory approvals.
The transaction involved the novation to PIF of SR2.8 billion ($755 million) of EEC's debt. After the completion of the novation; PIF become an equity investor in EEC following the issuing of new shares by debt conversion.
PIF's strategic investment will provide an opportunity to leverage synergies between EEC and PIF's ecosystem in the real estate; manufacturing, logistics and tourism sectors.
PIF believes that the transaction will also accelerate the development of EEC; by establishing King Abdullah Economic City (KAEC) as a great enabler of socio-economic development in Saudi Arabia.
Furthermore, the investment will aim to unlock the capabilities of promising non-oil sectors to enhance Saudi Arabia's efforts to diversify revenue sources; create strategic and operational value, improve the primary infrastructure, and support economic development.
Eng. Aiman AlMudaifer, head of PIF's Local Real Estate Division, said, "We are pleased to conclude this transaction. It has the potential not only to be a win-win for PIF and EEC but also to deliver wider benefits for the broader Saudi economy in line with the aims set out in Saudi Vision 2030.
"Our investment in EEC aligns with our broader 2021-2025 strategy; which also aims to build strategic economic partnerships through PIF and unlock the capabilities of promising sectors in the Kingdom, including transportation, logistics, real estate and tourism."
Cyril Piaia, Chief Executive Officer of Emaar, the Economic City; the master developer of King Abdullah Economic City – also said; "We welcome the Public Investment Fund as a major shareholder in Emaar, the Economic City.
This is also a significant milestone for KAEC that will accelerate its role as a socio-economic development platform in Saudi Arabia; and will enable it to contribute its share to the goals and objectives of vision 2030. We are happy to the prospect of this strategic partnership; and its potential to contribute to the development and achievement of the national agenda."