Samba Financial Group along with a consortium of banks has provided Shariah-compliant financing facilities to Saudi Arabian Airlines (Saudia) worth SR7.2 billion.
The transaction enabled Saudi Airlines to purchase 26 aircraft of different types, which the official carrier of the Kingdom added to its fleet to operate on international lines and raise its capacity to meet the expansion and development plans of Saudi Arabian Airlines. Samba has assumed the role of facility agent and security agent for the facility.
In addition to Samba Financial Group, the consortium includes Banque Saudi Fransi and the National Commercial Bank. Samba Capital & Investment Management Company (Samba Capital) as the sole bookrunner and coordinator for the initial bridge facility continued to take a key role in coordinating and structuring the current facility between Saudia and the bank consortium.
The financing package provides Saudi Arabian Airlines the financial flexibility to boost its fleet strength, thereby ensuring that aspirations to strengthen its presence within the growing commercial aviation sector in the region are met.
Khaled bin Abdullah Al-Molhem, director general of Saudi Arabian Airlines, said: “The global air traffic witnessed significant growth, notably in the Middle East, which is home to a number of major investors in this sector, thanks to their ability to make decisions and implement them faster.”
He highlighted that Saudia aims to build a strong hub in Jeddah as a major point for international air traffic and cement its competitiveness on a regional level.
Al-Molhem further emphasized that this agreement will strengthen the ability of Saudi Arabian Airlines to implement its expansion plans and grow its business in light of the opportunities and incentives in the aviation sector.
“The agreement also embodies the close partnership that connects us with the local banking sector and underlines the confidence of the participating banks in Saudia’s growth strategies,” he added.
Eisa bin Mohammad Al-Eisa, chairman of Samba Financial Group, said: “We are proud to play this pivotal role in closing this deal, which will have direct and positive effects in the embodiment of the aspirations of the national carrier of Saudi Arabia and cement its leading position within the vital aviation sector in the Middle East.”
Al-Eisa expressed his thanks and appreciation to other banks in the financing transaction for their constructive cooperation to close the deal, which underscores the strength of Saudi banking relationships, and ongoing commitment of Saudi banks to support the national companies and institutions to support their ambitious investment programs.”
Saudi Arabian Airlines is awaiting the delivery of 18 planes remaining from previous orders placed during the last six years totaling 90 jets. Saudia is in need of 100 new aircraft by 2020 to meet the escalating growth rates in the Saudi market, where the number of passengers traveling via Saudia hit 25 million a year, according to the statistics of last year, of whom 15 million passengers traveled on domestic flights to 27 airports in Saudi Arabia.