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Wed 3 Aug 2016 01:42 PM

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Saudi gov't said to mull takeover of struggling construction firm

Saudi Oger has been hit hard by a slowdown in the Saudi construction sector due to low oil prices and state spending cuts

Saudi gov't said to mull takeover of struggling construction firm
(Image for illustrative purpose only - Getty Images)

Saudi Arabia's government is discussing a proposal to take over construction conglomerate Saudi Oger, owned by the family of former Lebanese Prime Minister Saad al-Hariri, a Lebanese newspaper reported on Wednesday.

Oger has been hit hard by a slowdown in the Saudi construction sector due to low oil prices and state spending cuts, and wage payments to thousands of its workers have been delayed for months, according to Saudi media and the workers themselves.

The Arabic-language al-Akhbar newspaper quoted unnamed sources as saying that talks between Saad al-Hariri and the Saudi government were in their final stages.

"The agreement, expected to be reached within 10 days, would centre on the government or businessmen from the ruling family taking ownership" of the company, the newspaper said.

It added that the buyer would take over all debts and financial obligations of Saudi Oger.

Saudi Oger officials could not be reached for comment. In the past the company has declined to speak publicly about its finances. Saad al-Hariri and Saudi government officials could not immediately be reached for comment.

The newspaper said Saad al-Hariri was negotiating to keep a stake in the company, proposing to keep 40 percent in exchange for giving up some shares in a bank.

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