Riyadh – Mubasher: United Electronics Company (eXtra) has successfully finalised a securitisation agreement with Al Rajhi Bank against the assignment of SAR 166 million of its installment sales’ receivables portfolio.

The deal is the first for the company, as well as the first non-asset, backed Securitisation transaction in the Kingdom, according to the company’s statement to the Saudi Stock Exchange (Tadawul) on Thursday.

“The transaction demonstrates the Company’s success in managing its installment sales business from all aspects, with accomplished records of delinquency and bad debts ratios marking 10% and 3% respectively for its receivables portfolio worth SR 377 M by the end of Q1 2019,” eXtra said.

The company noted that the Murabaha transaction will be used to secure diversified funding sources for eXtra, which in turn will reflect positively on the Company’s key financial indicators and on its future credit rating.

It is worth noting that the transaction will yield an instant cash inflow worth SR 160 million that will be utilised for repayment of the company’s indebtedness to the banks.

Moreover, it will lead to the derecognition of the sold receivables from eXtra’s financials.

Accordingly, the company’s profits for the second quarter of 2019 will be increased by SAR 17.2 million.

Meanwhile, eXtra’s profits will be decreased by SAR 10.1 million, and SAR 7.6 million in the Q3 and Q4, respectively.