Saudi’s Middle East Paper Co inks 340 mln riyals Islamic financing for new factory
Middle East Paper Co has signed two Shariah-compliant facilities worth 340 million riyals ($90.67 million) with Bank Albilad.
The facilities will be used to finance the establishment of a factory for the production of tissue and hygienic paper, MEPCO said in a bourse filing on Monday (Jan 4).
The first facility for 136 million riyals is a medium-term loan of seven years.
The second, for 204 million riyals, is a short-term two-year bridging loan.
The two facilities are secured by a promissory note in favour of the bank, said MEPCO.
The total estimated cost of MEPCO’s new factory for tissue jumbo roll manufacturing is 338 million riyals, the company said on Dec 7. Construction will start in the first quarter of 2021 and is expected to be completed by the fourth quarter of 2022.
The new factory will have a production capacity of 60,000 tons a year.
The production of a basic consumer good is a diversification for MEPCO away from its core business of manufacturing containerboard.
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