Jamjoom wants to line up SAR 36 mn in financing for its Algeria JV

Drugmaker Jamjoom Pharma is set to provide a corporate guarantee for its Algeria JVto secure a SAR 36 mn revolving debt facility from Natixis Algérie Bank, Jamjoom said in a statement to Tadawul yesterday. The banking facility is set to fund the joint venture’s short-term working capital requirements.

In context: Jamjoom’s corporate guarantee is proportionate to its stake in Jamjoom Algeria Lil Dawa, currently at 51%. The guarantee will see the Saudi-based company on the hook for the equivalent of SAR 17.7 mn in the event the JV defaults on its debt repayments.

SOUND SMART- Unlike a term loan, a revolving facility is characterized by a degree of flexibility allowing the borrower to borrow, repay, and re-borrow funds within a specified credit limit and for various purposes. This kind of debt instrument is typically used to finance a company’s working capital needs, fund short-term projects, and address fluctuations in cashflow, providing a flexible source of financing for ongoing and changing financial requirements.