RIYADH: Jabal Omar Development Co.’s shareholders have approved a capital hike plan aimed at reducing the company’s liabilities by SR5.3 billion ($1.4 billion).

The amount to be settled is mainly made up of rent payments and other obligations owed to Alinma Makkah real estate fund, according to a statement.

The real estate developer will issue 225 million new shares to the fund’s unitholders, raising the firm’s current SR9.3 billion capital to SR11.5 billion.

As part of the deal terms, the legal ownership of the fund’s assets, which include three hotels and two commercial centers, will be transferred back to Jabal Omar.

“This transaction will see our liabilities drastically shrink, our balance sheet deleveraged, and our liquidity profile significantly improve. It will free up SR540 million in cash and allocate it to more productive, value-enhancing use,” said CEO Khaled Al Amoudi.

Most recently, the company reported a first-half revenue surge of 296 percent to near pre-pandemic levels at SR391 million, however its net loss widened by 316 percent to SR311 million.