Red Sea Gateway Terminal Company Limited (RSGT) signed the Islamic Financing Agreements for providing Islamic Financing of SAR 1,700 Million for the development of the Jeddah Islamic Port’s third container terminal Project with Al Rajhi Bank. Al Rajhi Bank and The Standard Bank of South Africa have jointly provided the financial advice for the RSGT which is implementing the development on a Build-Operate-Transfer (BOT) basis.
The Al Rajhi Bank-Standard Bank consortium was chosen as the financial advisor due to their wealth of experience in providing Project Finance Advisory, their strong multi-disciplinary advisory team and their extensive experience in comparable projects worldwide, says Mr. Aamer Alireza, CEO of Red Sea Gateway Terminal
The container terminal to be built at an estimated cost of about SR 1,900 million will be funded in a debt-to-equity ratio of 69:31. The equity for RSGT would be provided by the project’s founding shareholders, including SISCO, Xenel Industries, Tusdeer and City Island Holdings Limited, a subsidiary of the Malaysian company MMC International.
The SR 1,700 million Islamic Financing Facilities has been fully underwritten by Al Rajhi Bank, which includes SR 1,275 million Ijara Facility to cover most of the equipment and construction related costs to be incurred during the three year construction period. Al Rajhi Bank would provide SR 900 million and Saudi Fransi Bank would provide SR 375 million in the Ijara Facility for RSGT. The remaining SR 425 million Islamic Facilities being provided by Al Rajhi Bank for RSGT would include a Standby Facility, a Working Capital Facility and a Letter of Credit for Equipment Supply.
The Ijara Facility structured as a forward lease would have a tenor of 16 years. The banks would appoint RSGT as their Agent during the construction period of 3 years for procurement of the Ijara Assets and they would provide the Ijara financing for procurement of these Ijara Assets. After the construction period, the banks would own the Ijara Assets and lease these assets to RSGT. This Ijara structure known as “Ijara Mawsufah Fi Al Dhimmah” has been approved by Al Rajhi Bank’s Shariah Board.
Red Sea Gateway Terminal has engaged China Harbour Engineering Company Ltd. for civil construction and Shanghai Zhenhua Port Machinery Co Ltd (ZPMC) of China for supply of cranes and other equipments. The terminal, with a 740m long main berth, a 390 m long feeder berth and a deep draft of 18m, will have an annual container handling capacity of 1.5 Million TEU’s. It will also have its own dedicated 16.5m deep channel linking the Jeddah Islamic Port's main channel. The terminal, design carried by Halcrow International of UK, will accommodate to serve the next generation of container ships. The two berths are planned to be ready for operations during the fourth quarter of 2009.