The National Building and Marketing Company, listed on the parallel market (Nomu), announced a new strategic financial step aimed at strengthening the financial solvency of one of its subsidiaries. In an official statement published on the Saudi Stock Exchange (Tadawul), the company revealed that its subsidiary, Ajij Steel and Derivatives Factory Company, signed a Sharia-compliant credit facility agreement with the National Commercial Bank (NCB) for a total value of SAR 40 million.
Details of the agreement and guarantees provided
The company explained in its detailed statement that the financing term extends for 90 revolving days, granting the company significant flexibility in managing its cash flow. Regarding the guarantees provided by the company to secure this financing, these included a promissory note and a performance guarantee, in accordance with the terms and conditions of the National Bank of Saudi Arabia. The company identified the primary purpose of these facilities as financing working capital requirements, reflecting its commitment to ensuring the continuity of its operations at a high level of efficiency.
The importance of the steel sector in light of the urban development boom
This move comes at a crucial time, as the construction sector in Saudi Arabia is experiencing unprecedented growth, driven by the Kingdom's ambitious Vision 2030 projects. The steel and steel derivatives industry, in which Agig operates, is a cornerstone of the supply chains for the contracting and infrastructure sectors. This cash injection will enable the plant to meet the increasing demand for iron and steel products and purchase raw materials at competitive prices, thereby enhancing its competitiveness in the local market.
Enhancing operational and financial efficiency
From an economic perspective, working capital financing is a vital tool for industrial companies, helping to bridge the time gap between paying production costs and collecting sales revenue. This agreement underscores the creditworthiness of the National Building Company and its subsidiaries with major financial institutions such as the National Commercial Bank (NCB), which plays a pivotal role in supporting the Kingdom's industrial private sector. This financing is expected to positively impact the company's financial statements by increasing production and sales volumes in the coming periods.
