Saudi Construction Giant Dar Al Arkan To Redeem $400m Sukuk

Dar Al Arkan Real Estate Development Company, the largest publicly listed Saudi developer, on Monday announced its intention to redeem a $400 million sukuk, due to mature on May 28.

The sukuk, which is listed on the Irish Stock Exchange & Nasdaq Dubai, will be paid out of the company’s internal cash reserves, a statement said.

Dar Al Arkan Real Estate Development Company added that it has no imminent plans to issue new sukuks at this time.

Andy Raheja, CFO of Dar Al Arkan Real Estate Development Company, said: “Dar Al Arkan is in an enviable liquidity position at present, with cash and cash equivalents near SR5 billion, we plan to redeem the coming 2019 redemption out of cash reserves.

"Given the health of the business and our strong free cash flow conversion expectations, we see no immediate need to issue any new sukuks for the foreseeable future."

The $400 million sukuk was issued on May 27 2014, and was the seventh issue by Dar Al Arkan Real Estate Development Company.

Dar Al Arkan will continue to have $1 billion of sukuks, divided equally over the 2022 and 2023 maturities.

“We see our decision to pay down debt from cash reserves as a sign of confidence in our current strategy and belief in our ability to meet our commitments through operating cash flows,” added Raheja.