Creditors have agreed in principle to Saudi Binladin Group’s (SBG) request for a two-year extension on a 10 billion riyal ($2.7 billion) Islamic credit facility used to pay for delayed building work at the Grand Mosque in Makkah, sources said.
Reuters reported last month that SBG had asked a syndicate of banks for the credit to be extended beyond its maturity at the end of 2017 to the end of 2019.
This had now been agreed, subject to the signing of legal documents, and should be finalised by March, one source said.
Another source described the deal as financially rewarding for the creditors as SBG will continue to pay interest throughout the period of the extension.
The loan will now have a similar timeframe for the completion of the mosque project, which has been delayed to allow the Saudi government to defer some of its spending plans.
SBG, which due to historically close ties to the government has emerged as one of the heavyweights of the kingdom's construction sector, and the Ministry of Finance were not immediately available for comment.
The company has been involved in many major infrastructure developments in recent years, but like other contractors it has been hit by a stalling of projects and delayed payments as the government has curbed spending due to weaker oil prices.
Dubai Islamic Bank was the lead bank on the facility, with the other banks mainly United Arab Emirates-based including Emirates NBD and Noor Bank, the sources said, with one adding that Ajman Bank, Union National Bank and Mashreq were also involved.For all the latest construction news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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