ROSHN Group Secures Two Billion Saudi Riyal Shariah-Compliant Credit Facility from Saudi National Bank - Middle East Business News and Information
The agreement with Saudi National Bank marks a significant step forward for ROSHN Group.
This funding will cover the acquisition of ROSHN Front.
Riyadh– ROSHN Group, Saudi Arabia's leading multi-asset class real estate developer and a PIF Company, has agreed a two billion Saudi Riyal Shariah-compliant credit facility with Saudi National Bank, Saudi's largest financial institution. The loan agreement, which is for seven years, will be used to finance the acquisition of ROSHN Front.
This strategic move strengthens ROSHN's growth and drives ROSHN Front's long-term success by enriching its retail and commercial landscape, elevating tenant experience, and attracting top-tier brands and businesses.
The purchase of ROSHN Front marked ROSHN Group's expansion in two new verticals, namely commercial and retail. Opened in 2019, ROSHN Front has become a premier destination for shoppers and businesses, attracting over 7 million visitors annually. ROSHN Front—Retail, with a leasable area of over 81,800 square meters, is home to premier retail and F&B brands, while ROSHN Front—Business, with a leasable area of over 78,900 square meters, is occupied by reputed government, private sector, and multinational entities.
'This agreement with Saudi National Bank marks a key milestone for ROSHN Group, enabling us to unlock significant value from this acquisition, creating long-term benefits for our stakeholders and the communities we serve,' said Avinash Pangarkar, Group Chief Finance Officer, ROSHN Group. 'I am deeply grateful to everyone involved in this agreement that drives both financial growth for ROSHN Group and enhances the quality of life for those we serve.'
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The offering would not transfer ownership of the land itself. Instead, sukuk holders would be entitled to a 'common right' to the project's profits or a share of its financial returns, without holding any direct ownership of the land. At the end of a sukuk term, holders are repaid the full value of their initial investment, at which point their relationship with the asset ends. Sources unanimously emphasized that, throughout the sukuk's duration, ownership does not get transferred under any circumstances. This, they stressed, is very clear. Even in the event that the government defaults on repayment, the asset cannot be seized or transferred. 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The government could include clauses allowing for the sukuk's term to be extended or other conditions to be introduced. Still, 'if the state is unable to repay the sukuk and its profits, it may be forced to swap debt for assets once again,' the source added. This, however, would reflect the government's broader debt management strategy — not the legal nature of the sukuk itself. In its Thursday statement, the Finance Ministry reiterated that the land was transferred under its authority to issue sovereign sukuk and 'reduce the government's debt burdens' — a 'favorable' alternative to selling the land, according to the ministry, as it can 'partner with financial and economic entities to replace existing debt with joint investment projects […] and spur the development of the land to generate sustainable income and create new job opportunities.' The most ambiguous aspect of the presidential decree lies in its reference to debt reduction. After all, sukuk are a form of debt. According to the International Monetary Fund's Government Finance Statistics Manual — and as reiterated in the IMF report on its third review of Egypt's Extended Facility Fund — sukuk are classified as part of public debt in the state budget, just like bonds, treasury bills, and other forms of borrowing. If these sukuk constitute new debt, how can the decree possibly contribute to reducing Egypt's mounting debt burden? One straightforward scenario can be found in the Finance Ministry's statement following the decree: only a portion of the allocated land will be used to back the sukuk, while revenues generated from future economic activity on the remaining land could be channeled toward repaying debt and covering interest payments. The World Bank official, speaking to Mada Masr on condition of anonymity, explained that the government could use its share of project revenues to cover periodic dues to sukuk holders — a strategy they described as a form of 'debt recycling.' Economic researcher Mohamed Ramadan suggests another scenario: 'an accounting game' in which payments the government owes to sukuk holders are labeled as 'returns' rather than 'interest.' This classification would exclude them from debt servicing records, thereby reducing the nominal size of the country's total debt on paper. Ultimately, the decree appears to signal the start of a broader shift — one that is likely to be followed by a series of further decisions clarifying the specifics of this approach and its true implications for the public and for public finances.
