Dar Al Arkan Real Estate Development Co. (ALARKAN), the company with $1 billion of debt due in 2012, sold land to Saudi Basic Industries Corp. (SABIC) for 742 million riyals ($198 million).
Dar Al Arkan sold the land in the Shams Al Riyadh project in the kingdom’s capital and the transaction will be reflected in Dar Al-Arkan’s second-quarter financial results, the company said in a statement today. Saudi Basic, the world’s biggest petrochemicals maker, plans to use the plot to build a residential complex for employees, it said in separate statement.
The real-estate developer, which was cut to neutral from overweight at HSBC Holdings Plc in March, has a $1 billion sukuk due in July, according to data compiled by Bloomberg. Its Islamic bonds maturing in 2015 were cut to hold from buy in March by Exotix Ltd. on concern over the company’s past financing deals.
Dar Al Arkan’s first-quarter profit rose for the first time since at least 2009, advancing 7 percent to 292.6 million riyals, the Riyadh-based company said last month. The yield on its $450 million sukuk due in February 2015 declined 357 basis points, or 3.57 percentage points, this year to 10.48 percent.
The company plans to repay about 5 billion riyals this year as it sells land to build cash holdings, Chief Financial Officer Andy Raheja said in an interview in February. The developer said in March an independent assessments of a majority of its property portfolio showed the market value is 53 percent above the book value.
To contact the editor responsible for this story: Claudia Maedler at firstname.lastname@example.org