Announcement of successful offering
SAL Saudi Logistics, a leading provider of air cargo ground handling and logistics solutions, announced the successful completion of a SAR 1 billion sukuk issuance. This private placement targeted investors within and outside the Kingdom of Saudi Arabia, as part of the company's previously approved sukuk issuance program.
In an official statement published on the Saudi Stock Exchange (Tadawul) website, the company detailed the issuance, noting that the final offering value settled at SAR 1 billion, distributed across 1,000 sukuk. The sukuk offers a variable return calculated based on the six-month Saudi Interbank Offered Rate (SAIBOR) plus a profit margin of 130 basis points, with returns paid semi-annually. The sukuk have a five-year maturity, with the company retaining the right to early redemption in certain cases, as outlined in the prospectus. The settlement date for the sukuk is scheduled for January 28, 2025.
Strategic context and the importance of funding
This issuance comes at a pivotal time for SAL, which is striving to solidify its position as a major player in the logistics sector, both locally and regionally. This financing is a strategic move aimed at providing the necessary cash flow to fund the company's ambitious expansion plans, which include infrastructure development, expanding its warehouse network, and investing in cutting-edge technologies to enhance operational efficiency and deliver innovative solutions to customers. The successful offering reflects strong investor confidence in the company's business model and its future growth prospects.
Alignment with the Kingdom's Vision 2030
This step gains added significance when viewed within the broader context of Saudi Vision 2030 and the National Transport and Logistics Strategy. This strategy aims to transform the Kingdom into a global logistics hub connecting three continents through the development of ports, airports, and transportation networks. By enhancing its financial and operational capabilities, SAL directly contributes to achieving these national objectives, supporting efforts to diversify the Saudi economy and reduce its reliance on oil. Empowering leading national companies like SAL is a cornerstone of building a sustainable and competitive economy.
Impact of the release on the market and the sector
On the economic front, this issuance demonstrates the maturity and depth of the sukuk market in the Kingdom as an effective and Sharia-compliant financing tool, providing companies with robust alternatives to conventional bank financing. The investment of these funds in new projects is expected to create jobs and stimulate growth in the logistics sector and related industries. This success also strengthens SAL's competitive position, enabling it to address regional and international challenges more effectively and deliver integrated logistics services that meet the highest global standards.
