Saraya Aqaba, a top private shareholding firm in Jordan, said its board has approved a plan to raise $300 million in new equity from shareholders to enable the firm to complete a $1 billion Red Sea resort development.

The decision by the board, whose chairman is Lebanese Prime Minister Saad Hariri, was taken earlier this month and will be submitted to shareholders for approval at an extraordinary general meeting on June 24.

The move would raise the firm's equity capital to $773 million.

One of the biggest shareholders, the Hariri family is Jordan's largest foreign real estate investor with a number of multi-billion dollar projects in the pipeline or under construction, including a new downtown business district in the capital.

The other main shareholders are Jordan's state pension fund, Arab Bank and the Aqaba Development Corporation, the government-owned developer of the Red Sea port of Aqaba.

Banking executives say the capital hike will enable the firm to get further financing to complete the mixed-use leisure and tourism resort located on a 634,000 square metre site on the northern tip of the Gulf of Aqaba, adjoining Israel's Eilat resort.

The additional financing from a banking consortium led by Arab Bank is expected to match the equity capital hike, banking sources said.

Banks have for months been reluctant to extend a syndicated loan to Saraya Aqaba until its leading shareholders invested more money in the project that was due for completion in 2009, the sources said.

So far Saraya Aqaba has drawn mainly on its own JD335 million ($473 million) capital to finance the project that includes an artifical lagoon that adds approximately 1.5 km of beachfront, making it Jordan's biggest resort.

The firm has already signed deals with Starwood Hotels and Resorts World Wide Inc and the UAE's Jumeira to manage around 1,100 hotel rooms in the resort that features hotels, beachfront villas, a convention centre, an old souk and a wharf promenade.

The project's contractor is Saudi Oger Ltd, owned by the Hariri family.

The once booming property market has seen prices falling and billions of dollars worth of projects by leading Gulf Arab investors put on hold or cancelled due to financing problems. – Reuters