Dar Al-Arkan retains its Standard & Poors rating (8980M)
23 Août 2011 - 4:58PM
UK Regulatory
TIDM44GO
RNS Number : 8980M
Dar Al-Arkan International Sukuk II
23 August 2011
Dar Al-Arkan Retains Its Long-Term Corporate Rating at "BB-",
With a Stable Outlook from Standard & Poor's
Dar Al Arkan Real Estate Development Company (DAAR) announced
that it has received a reaffirmation of its "BB-"long-term
corporate rating with a stable outlook from Standard & Poor's
(S&P) after its recent review.
The reaffirmation was granted, given that DAAR's financial
performance during the second quarter improved in comparison to the
first quarter in terms of margins, collection of trade receivables
and operating cash flow generation. DAAR also maintains sufficient
leverage for its financial covenants; Shareholders' equity of $4.0
billion (minimum requirement $2.3 billion), total liabilities to
total assets of 37% (maximum permitted 65%), and current ratio of
2.1x (minimum required 1.1x).
In addition, DAAR has managed its cash consumption during the
second quarter. By slowing down land acquisitions, while account
receivable balances were collected and decreased from their peak
during the first quarter of 2011.
On a macro level, the Saudi government injected this year SAR40
billion to the Real Estate Development Fund (REDF) that provides
soft loans Saudi citizens for the acquisition of housing. Also the
Saudi government housing stimulus of SAR250 billion in March 2011
for the development of 500,000 housing units will increase demand
for land and housing developments in the short to medium term.
Commenting on this announcement, Mr. Abdullatif Al Shalash,
Managing Director of DAAR said, "The Company's ability to retain
its credit rating from S&P reflects the stable financial
position of DAAR and shows its capability to meet its long/short
term financial obligations as well as its resilience managing
against adverse changes in economic conditions and/or operating
environment thus ensuring the continuity of implementing our
projects". Commenting on DAAR's macro level position, "DAAR is well
positioned to capitalize on the short-term with the REDF initiative
and in the medium term on the housing stimulus package".
Mr. Al Shalash also added, "S&P initiated coverage on DAAR
in January 2010, and has since maintained its "BB-" long-term
corporate credit rating, with a stable outlook.This continuous
reaffirmation of DAAR corporate credit rating by S&P is
indicative of the company's positive record of accomplishment
within the industry and its strong position as the largest real
estate developer in the Kingdom."
This information is provided by RNS
The company news service from the London Stock Exchange
END
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