Riyadh – Mubasher: Jabal Omar Development signed on Tuesday a contract to sell three hotels at a value of SAR 6 billion.

The three hotels are Makkah Conrad, Hilton Makkah, and Hyatt Regency Makkah, in addition to Al Khalil Shopping Center, according to a bourse filing on Wednesday.

The contract is part of the company's memorandum of understanding (MoU) signed with Alinma Investment to establish a real estate fund after obtaining the required approvals from the Capital Market Authority (CMA).

Under the deal, Jabal Omar will rent and operate the aforementioned assets after selling them to the fund for ten years and will retain the right to repurchase them after five years from the term, the statement said.

The company added that it will use part of the selling proceeds to pay current banking obligations and the rest to implement the project's strategy.

It is expected that a positive impact will appear on the financial statements of 2017, after the accomplishment of the fund's setup and acquisition of the investment company on the assets, Jabal Omar noted.

Moreover, Jabal Omar inked an agreement with Bank Albilad to convert a short-term Sharia-compliant bridge loan from the bank into a long-term loan, according to a bourse filing.

The loan will be paid over four years through seven semi-annual instalments (at six-month SAIBOR, in addition to the profit margin).

The company pinpointed that the loan's conversion aims to boost its liquidity, expecting a positive impact on the shareholder's equity as of the third quarter of the year.