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Wed 2 Oct 2019 03:26 PM

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Boutique banks compete for $15bn Binladin debt revamp

Saudi Arabia's biggest construction firm is restructuring debt after the kingdom delayed payments to contractors following the drop in oil prices.

Boutique banks compete for $15bn Binladin debt revamp
Saudi Arabia took about a 37% stake in the firm from the Binladin family to “settle outstanding dues” after Bakr Binladin was swept up in a so-called corruption crackdown in November 2017.

Rothschild & Co. and Moelis & Co. have been shortlisted to advise on restructuring about $15 billion of debt at Saudi Arabia’s biggest construction firm, according to people with knowledge of the matter.

The boutique banks made pitches to Saudi Binladin Group last month for what would be one of the Middle East’s biggest debt revamps, the people said, asking not to be identified because the matter is private. Ken Moelis, the founder and chief executive officer of the eponymous investment bank, travelled to the kingdom to lead the process, one of the people said.

Goldman Sachs Group also pitched for an advisory role, but hasn’t been shortlisted, the people said. No final decisions have been made and Jeddah-based Binladin may decide not to hire an adviser, they said.

Rothschild and Moelis declined to comment. Representatives for Binladin couldn’t be reached for comment.

Delayed payments

Binladin - for decades Saudi Arabia’s go-to developer for mega-projects such as airports and holy sites in Makkah and Medinah - is restructuring debt after the kingdom delayed payments to contractors following the drop in oil prices.

The government took about a 37% stake in the firm from the Binladin family to “settle outstanding dues” after Bakr Binladin, the half-brother of al-Qaeda founder Osama Bin Laden, was swept up in a so-called corruption crackdown in November 2017.

The potential restructuring follows state-owned Dubai World Corp.’s $23.5 billion debt overhaul and property developer Nakheel PJSC’s $10.5 billion workout in 2009. Saudi Arabia’s Ahmad Hamad Algosaibi & Brothers is in talks to restructure about $6 billion of debt.

Binladin last month hired a new managing director, Abdullah Mohammed Nour Al Rehaimi, to help its business recover from the downturn, according to an internal announcement seen by Bloomberg. Rehaimi was previously CEO of Saudi Arabian food company Savola Group.

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