JODC Shareholders Approve Landmark Alinma Fund Debt to Equity Transaction, Set to Issue 225 Million New Shares in Return for Settling SAR 5.3 billion in Outstanding Debt Owed to the Fund

Makkah, KSA; 28 August 2022: Jabal Omar Development Company (“JODC” or the “Company”) (Tadawul: 4250), one of the largest real estate developers in Saudi Arabia and the master developer of the iconic mega mixed-used project in Makkah, Jabal Omar, received shareholder approval for issuing new ordinary shares in the JODC to the unitholders of the Alinma Makkah Real Estate Fund (the “Fund”) and in exchange will extinguish all debts owed by the Company to the and settle all rights and obligations related to the Fund.
As part of the landmark and strategically significant transaction, JODC will be reducing its liabilities by SAR 5.3 billion, which is primarily made up of rent payments and other obligations owed to the Fund, and in return, the Company will issue 225,134,162 new ordinary shares to the Fund’s unitholders. As part of the deal terms, the legal ownership of the assets in the Fund, which is made up of three hotels and two commercial centers in Phase 1 of Jabal Omar, will be transferred back to JODC.

Commenting on this significant milestone, Saeed Al Ghamdi, Chairman of JODC, said:
“We look forward to welcoming our new shareholders and want to reaffirm the Company’s determination to deliver sustainable value by executing on its comprehensive transformation strategy, enabling JODC to capture attractive opportunities in the Kingdom’s booming Hajj and Umrah and tourism sectors.”

On his part, Khaled Al Amoudi, CEO of JODC, said:
“This is the largest and most significant transaction within our comprehensive capital structure optimization plan. Today’s successful outcome will set us on a path towards a better, and more sustainable tomorrow. This transaction will see our liabilities drastically shrink, our balance sheet deleveraged, and our liquidity profile significantly improve. It will free up SAR 540 million in cash and allocate it to more productive, value-enhancing use. We have turned a critical corner and are on an accelerated journey towards our next phase of growth.”

The positive outcome of the Extraordinary General Meeting (EGM) held on 25 August 2022, comes at a crucial time for the Company, which reported a six-month revenue of SAR 391 million, nearing pre-pandemic levels. For over 18 months, the Company, which also reported improving operating profit in the six-month period, has been executing a companywide operating, organizational and financial transformation plan, to enhance its efficiencies, and reduce its costs and liabilities, making it a more agile, financially robust and resilient Company.

The transaction is subject to the satisfaction of all the conditions set out in the Transaction Agreement.