Saudi's Fawaz Alhokair closes in on loan for $1.1bn Arab Bank stake buy - sources

The family firm aims to buy Saudi Oger's 20.93 percent stake in Arab Bank, banking sources say
Saudi's Fawaz Alhokair closes in on loan for $1.1bn Arab Bank stake buy - sources
By Reuters
Fri 18 Nov 2016 04:59 PM

Saudi Arabia's Fawaz Alhokair
family aims to secure funding by next week to buy Saudi Oger's
20.93 percent stake in Arab Bank, banking sources said
on Thursday, in a deal likely to be worth around $1.1 billion.

The final group of lenders has yet to be finalised for the
deal, which has been agreed between the two companies subject to
financing being secured by next week's deadline, one of the
sources, a Gulf-based banker, said.

If the funding is not secured by then, the family, best
known for its fashion retail business, would seek an extension
to the purchase agreement to secure the funding, the banker
added.

Seeking extensions on transactions, whether for acquisitions
or debt restructurings, is not uncommon in the Gulf, where
negotiations traditionally happen at a slower pace than in the
Western world.

Fawaz Abdulaziz Alhokair Co, Saudi Oger and Arab Bank didn't
immediately respond to requests for comment.

Fawaz Alhokair has emerged as the frontrunner for the stake
in the Jordan-based bank after construction giant Saudi Oger,
owned by the family of Lebanese Prime Minister-designate Saad
al-Hariri, began seeking buyers to help ease its cash flow
problems bought on by woes in Saudi's building sector.

The Arab Bank sale will help repay a $1.03 billion loan from
regional and international banks due to mature in February.

Fawaz Alhokair is seeking around $750 million to $900
million through a syndicated loan, with the remainder of the
acquisition funding to come from the family, two of the sources
said.

The Gulf-based banker said the deal was being arranged by
Arab National Bank and could include participation from other
Saudi banks, as well as regional lenders including Emirates NBD,
First Gulf Bank and Qatar National Bank.

Fawaz Alhokair acts as franchisee in the region for brands
including Zara and Banana Republic, and also has interests in
real estate and hospitality, as well as finance and investments
through its FAS Capital arm.

A Saudi-based source said Fawaz Alhokair was keen on the
deal as it wanted to diversify out of retail-linked assets at a
time of slower growth in government and consumer spending as a
result of the dip in oil prices.

Fawaz Alhokair's profits in the second quarter slumped 81.1
percent.

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