AFG International Gets SAR 1.35B Loan From Al-Futtaim

Shareholders of AFG International Co. (Cenomi Retail) approved a SAR 1.35 billion shareholder loan agreement with Al-Futtaim Private Co. during a general assembly meeting, the company said in a filing to the Saudi stock exchange.

The loan carries a fixed profit rate tied to the Saudi Arabian Interbank Offered Rate (SAIBOR) plus a margin, with a maturity of seven years. Proceeds will be used to refinance existing debt and fund working capital requirements, according to the filing.

AFG International operates retail franchises in Saudi Arabia, including brands such as Marks & Spencer and Charles & Keith. The company has been managing a leveraged balance sheet since its acquisition by Al-Futtaim Group in 2022, when the UAE-based conglomerate took a controlling stake in a deal that valued the retailer at roughly SAR 3.7 billion.

The shareholder loan structure avoids the dilution that would come with an equity raise and gives AFG International access to capital at terms that reflect its parent company's credit standing rather than its own. Al-Futtaim Private Co. is the entity through which the group holds its AFG International stake.

AFG International shares closed at SAR 11.22 on the Tadawul, giving the company a market capitalization of roughly SAR 2.5 billion. The stock has declined about 12% over the past 12 months.