Houlihan Lokey Advises Alhokair Fashion Retail

Houlihan Lokey is pleased to announce that the Fawaz Al Hokair Group and its listed subsidiary, Alhokair Fashion Retail, have successfully raised a seven-year $650 million multitranche, multicurrency, Sharia-compliant secured term loan facility and a three-year $150 million Sharia-compliant revolving credit facility. Houlihan Lokey served as joint financial advisor to the company and the group.

Alhokair Fashion Retail is a leading diversified fashion, beauty, and food retailer in Saudi Arabia, with international operations across 13 countries and long-term relationships with more than 80 leading international retail brands. The business operates 530,000 square miles of real estate space across approximately 100 shopping malls. The company is listed on the Saudi Stock Exchange and has a market capitalisation of c. $1.4 billion as of 2 March 2020.

The targeted refinancing is being undertaken to enhance the company's operational and financial flexibility as it seeks to implement a number of strategic initiatives aimed at improving profitability and cash flow generation, including a targeted repositioning of its store portfolio towards more profitable brands, developing its newly acquired food operations, investing in its growing beauty offering, and tactically exiting selected international operations to refocus the business on its core markets.

Houlihan Lokey is advising the group on a multipronged strategy, having previously advised another listed subsidiary, Arabian Centres Company (ACC), on its inaugural sukuk ratings from Moody's and Fitch of Ba1 and BB+, respectively, and in the raising of $1.9 billion to refinance existing debt. Alhokair Fashion Retail is a significant counterparty to ACC, typically renting c. 20% of the footprint of ACC malls. This created additional complexity and drove the need for a near-parallel process to ensure shared momentum across transactions, albeit with different financing structures.