Saudi Airlines Catering (6004.SE) signed a lease agreement with Saudi Airlines Real Estate Development Company (SARED) for the renovation and operation of the hotel and its premises located near Saudia’s complex in Jeddah. Catering will renovate, furnish and run the hotel and its entertainment centre, which comprises 96 suites, along with providing catering and laundry services. The lease signed will be for SAR2.4 million per annum for a seven-year term, starting 1 April 2016, with an annual increase of a maximum of 5% starting the fifth year of the contract term. The hotel is fully owned by Catering’s largest shareholder, Saudia. Catering will finance the project from its operating cash flows and expects a positive impact from the deal to materialise from 4Q2016. The deal is pending approval of the company’s shareholders in the upcoming AGM. (Company disclosure)