Leejam Sports Company , a leading sports club operator in Saudi Arabia and owner of the popular Fitness Time chain, announced the signing of a significant agreement to extend and increase its Sharia-compliant credit facilities by a total of SAR 350 million with Emirates NBD Bank. This financing is a strategic step to support the company's ambitious future expansion plans and meet its working capital requirements.
Strategic background and context
Founded in 2008, Leejam Sports quickly became a major player in the Kingdom’s fitness market, operating a vast network of clubs under the “Fitness Time” brand. This funding move comes amidst the rapid growth of the sports and entertainment sector in Saudi Arabia, a key pillar of the Kingdom’s Vision 2030. Through its Quality of Life Program, the Vision aims to increase the percentage of individuals participating in physical activities and sports, creating a fertile investment environment for companies like Leejam to expand their services and reach new segments of society.
Details of the financing agreement
According to the official statement published on the Saudi Stock Exchange (Tadawul), the facilities were structured to meet the company's various needs. The agreement includes a medium-term facility of SAR 200 million (Murabaha financing), which will be allocated to finance capital and investment expenditures related to opening new branches and upgrading existing ones. The remaining amount of SAR 150 million consists of short-term facilities and multi-purpose letters of credit, intended to support the company's working capital requirements and daily operations.
The medium-term facilities have a term of four years, with a one-year grace period, while the short-term loan has a term of three months, and the letters of credit have a term of one year. The company indicated that the collateral provided for this financing is a promissory note, reflecting the high level of confidence the banking sector has in the company's financial solvency and future plans.
Importance and expected impact
This agreement is of paramount importance on several levels. Locally , it will contribute to strengthening Leejam Sports' market leadership, providing more job opportunities for Saudi youth, and increasing the number of sports facilities available to citizens and residents, which directly contributes to achieving public health and quality of life goals. Regionally , this substantial financing from a prestigious regional bank like Emirates NBD demonstrates the attractiveness of the Saudi market and the strength of its services sector, potentially encouraging further regional investments. Economically , this step supports efforts to diversify the economy away from oil by injecting significant investments into the non-oil private sector and enhancing its role in the Kingdom's sustainable development.
