Adhiyafa Signs SR 12O Million Loan Deal with Two Banks

Adhiyafa company has signed an SR 120 million loan deal with the Saudi American Bank (SAMBA) and Saudi Arabian Investment Bank (SAIB) to finance a major real estate project in Makkah. According to Asharq Al-Awsat, the deal was based on the Islamic financing system of Musharaka and Murabaha (participation and profit-sharing).

Banking sources described the agreement as the largest deal based on Murabaha. They believe that it will encourage other banks to provide group financing on the basis of Murabaha.

The deal was signed by Osama Zainy, executive director of Adhiyafa, Ronald Deangelis of SAMBA and Hasan Maghrebi of SAIB. The loan, divided equally between the two banks, provides 40 percent of finance required by Adhiyafa to implement its SR 300 million shopping centre project in Mecca.

The Jeddah-based Adhiyafa is owned by nine investors dominated by Ahmad Zainy Co., which has a stake of 86.9 percent in the firm. Others investors are: National Service Co. (Nesma), Suleiman Khayyat, Khaled Al-Zainy, Auni Shaker, Muhammad Aba Al-Khail, Ibrahim Al-Daghaither, Abdullah Dahlan and Talal Bakr, managing director of Al-Lujein. The shopping centre will be located 3.5 kilometres from the Haram Mosque in Mecca and 1.5 kilometres from the ring road. The centre will cover an area of 125,000 square metres. It includes a hotel, residential towers and commercial offices as well as 180 shops, hotels, restaurants, recreation centres and parking areas.

Adhiyafa will start the new project, which was designed by the British SPP Company, at the beginning of next month. The central area in Mecca, close to the Haram Mosque, has attracted a large number of real estate investors. The same is the case of the area located near the Prophet's Mosque in Madinah.

A number of major real estate projects have been built close to the two holy mosques to accommodate the growing number of pilgrims.