Barwa Real Estate announced that Lusail Gulf Development Company (wholly owned by Barwa Group) has reached an agreement to sell two plots of land in Lusail with a total area of 3,476,192 (three million, four hundred and seventy-six thousand, one hundred and ninety-two square meters).
The total agreed sale price is 6,361,014,218 (six billion, three hundred and sixty-one million, fourteen thousand, two hundred and eighteen riyals), provided that it is collected during the period from the date of completion of the sale until the second quarter of 2024, and the full sale price will be used to pay off financing obligations on the group.
It is known that Lusail Gulf Company has purchased the two plots of land referred to in the years 2010 and 2014, which have a book value of 5,890 million riyals as stated in the consolidated financial statements on March 31, 2023, as the group recorded valuation losses related to the same land of 522 million riyals within the item of net fair value profit from real estate investments in the company’s consolidated financial statements for the past fiscal year 2022.
Note that the estimated amounts of the profits resulting from the sale transaction will be announced after the completion of the sale process and the transfer of ownership of the land to the buyer, enabling the group to calculate all costs and expenses related to the land. The sale process comes as part of Barwa’s strategy to exit from some non-income-generating assets, allowing for a reduction in the value of financing obligations, and then financing costs, which are witnessing a significant increase recently in all global markets, which will reflect positively on the group’s cash flows and its financial position as well as financial indicators. It also contributes to directing the cash generated from operation towards developing the income-generating investment portfolio, and then achieving sustainable growth in shareholder returns.
