Saudi Arabia’s finance ministry has loaned Saudi Binladin Group with $2.9 billion to help revive the construction giant, with further cash transfers possible in the near future, sources close to the matter told Reuters.
The money, for which land owned by the Binladin family will act as security, will go towards completing key government projects including the King Abdullah Financial District in Riyadh, which needs to be ready in time for Saudi Arabia to host the G20 Summit in 2020. Other key projects include the expansion of facilities at Islam’s holy mosques in Mecca and Medina.
The loan will also be used to repay owed staff wages, a result of payment delays caused by the industry slowdown, as well as bank creditors.
The government is expected to take a significant stake (reportedly 35 percent) in the company as part of a financial settlement with state authorities following the detention of chairman Bakr Binladin and his brothers Saleh and Saad in an anti-corruption crackdown in November.
Binladin is Saudi Arabia’s biggest builder, having had over 100,000 employees at its height. It plays a major role in the country’s plans to diversify its economy beyond oil through property and tourism projects.
In recent years, however, the construction giant has faced stalled projects and delayed payments as the government tightened its budget in response to lower oil prices.
In 2015, it was also temporary excluded from new state contracts following a crane accident that killed 107 people at Mecca’s Grand Mosque.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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