Gulf Construction Online - SBG secures $667m loan

Saudi Focus

SBG secures $667m loan

01 June 2016

Construction firm Saudi Binladin Group (SBG) has secured a SR2.5-billion ($667 million) loan from local banks to ease its financial pressures, banking sources aware of the matter said.

Arab National Bank and Saudi British Bank are providing the loan, which SBG is using to cover redundancy costs for workers it is laying off, back salaries and severance costs, the sources said.

Two of the sources, declining to be named, said SBG had pledged land as collateral for the loan. They did not elaborate on the size or location of the land, or how long the loan was for.

The group, which has been struggling to pay its workers, has made delayed salary payments to 10,000 employees, a spokesman for the company said. He declined to comment further on the Saudi-based company’s financial situation or say whether it still owed money to some of its other workers. The company, which last year had a total workforce of around 200,000 according to its LinkedIn page, has laid off tens of thousands of foreign workers in Saudi Arabia and thousands have not been paid for months, leading to work stoppages.

Meanwhile, the government is now allowing SBG to resume bidding for state projects in a decision that may ease the financial pressure on the troubled firm and banks which lend to it, Al-Watan newspaper reported. The company has been struggling since September last year, when it was suspended from obtaining new government contracts after a crane toppled into Makkah’s Grand Mosque during a dust storm, killing 107 people.

The newspaper also quoted a spokesman for the civil aviation authority as saying that in response, the company would resume work at the multi-billion-dollar King Abdulaziz International Airport project in Jeddah.