Riyadh - Mubasher: Abdullah Abdul Mohsen Al-Khodari Sons Company signed two contracts to renew Islamic credit facilities worth SAR 625 million ($166.7 million) with Alawwal Bank and Gulf International Bank.

The first agreement with Alawwal Bank is worth SAR 373 million and aims to provide guarantor commitment, financing capital, and working capital needs for specific projects and for the company’s goals in general, the company clarified in a statement to the Saudi Stock Exchange (Tadawul) on Wednesday.

The first agreement includes Murabaha financing, multi-bonds, and documentary credit. About 50% of the value of credit facilities given by Alawwal Bank are dedicated to Murabaha loans and 50% to multi-bonds.

The contract will end on 28 February 2018. Most of the facilities will be paid through the Murabaha system at 50% of the returns of the projects.

The second agreement’s value with Gulf International Bank amounts to SAR 252 million and aims to provide bonding commitments and fund the working capital and capex requirements of the projects, the company clarified in a separate statement.

About 60% of the facilities are funded under the Murabaha financing mode and documentary credits while 40% limits are for multi-purpose bonds.

The facilities are secured by promissory note and assignment of the contract proceeds of the financed projects. The agreement will end on 27 February 2018; however, the credit limits will mature over the life of the prospective financed projects. The Murabaha facilities are settled at different periodical maturities.