The Saudi Paper Manufacturing Company, a leading company in the Kingdom's manufacturing sector, announced a significant strategic step: amending its existing credit facility agreement with Saudi First Bank (SAB). This move is part of the company's ongoing efforts to strengthen its financial structure and support its future operational plans.
In an official statement published on the Saudi Stock Exchange (Tadawul) website, the company clarified that the amended agreement includes the addition of new medium-term financing of SAR 70 million. This amount is added to the existing working capital facilities of SAR 100 million, bringing the total value of credit facilities granted to the company by the bank to SAR 170 million.
Details of the agreement and its strategic objectives
According to the disclosure, the new medium-term facility has a repayment period of 48 months (four years), including a three-month grace period, providing the company with sufficient flexibility in managing its cash flow. The working capital facility has a 12-month term and is renewable. As collateral for these facilities, the company has provided a promissory note for the total value of the agreement. The primary objective of this move, as stated by the company, is to restructure its medium-term debt, which will improve cash flow, strengthen its financial position, and reduce overall financing costs, thereby enhancing its competitiveness in the market.
The economic context and the importance of the step
The Saudi Paper Manufacturing Company (SPMC), established in 1989, is a major player in the paper and recycling industry in the Middle East and North Africa region. This financial adjustment comes at a time when the Saudi industrial sector is experiencing rapid growth and significant government support, in line with the Kingdom’s Vision 2030 goals, which aim to diversify the economic base and reduce dependence on oil. Strengthening the financial capacity of companies like SPMC will enable them to expand their operations, invest in modern technologies, and increase their production capacity, thereby contributing more effectively to non-oil GDP.
Expected impact on the company and the sector
Domestically, this financing is expected to positively impact the stability of the company's operations and its ability to meet growing demand in the Saudi market. Furthermore, the improved debt structure provides management with greater flexibility in future investment decisions. Regionally, strengthening the financial position of a leading company like "Paper Manufacturing" enhances its competitiveness in the GCC and Middle East markets. This partnership between the company and Saudi First Bank demonstrates the maturity of the Kingdom's financial sector and its capacity to provide innovative financing solutions that support the growth of vital sectors, thereby enhancing the overall attractiveness of the Saudi investment environment.
