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Thu 28 May 2015 03:23 PM

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Saudi builder Binladin plans up to $265m sukuk issue

Funds from the deal will reportedly be used to finance costs related to work at the King Abdulaziz International Airport in Jeddah

Saudi builder Binladin plans up to $265m sukuk issue
Saudi money, Saudi currency, Saudi economy, Saudi finance, GCC currencies

Saudi Binladin Group has begun marketing a 364-day sukuk issue to local investors in the kingdom which could raise up to 1 billion riyals ($265 million) for the construction firm, sources aware of the matter said on Thursday.

The transaction is being managed by BNP Paribas' Saudi unit and the investment banking arm of Gulf International Bank, two sources said, speaking on condition of anonymity as the information is not public.

Funds from the deal will be used to finance costs related to its work at the King Abdulaziz International Airport in Jeddah, according to one of the sources. Binladin Group is the main contractor for the project which aims to increase the airport's capacity to handle 80 million passengers annually by 2035.

Binladin Group is one of the largest construction firms in the kingdom, building airports, hospitals and universities as well as conducting work on the holy mosques in Mecca and Medina. It has also completed projects elsewhere in the Middle East, as well as Africa and Asia, according to its website.

Calls to a media representative for the firm went unanswered.

The last time Binladin Group was in the bond market was in July 2013, when it sold a 1 billion riyal 364-day sukuk, which carried a profit rate of 2.5 percent. That transaction was arranged by the same two banks appointed for the current issue.

After a slow start to the year, sukuk issuance in the riyal-denominated market has picked up in recent weeks. Binladin Group joins Riyad Bank, Saudi British Bank, Najran Cement and the National Shipping Company of Saudi Arabia (Bahri) in either announcing or completing deals.

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