01 August 2016

Saudi Binladin Group (SBG), the kingdom’s biggest construction conglomerate, appears to have pulled back from the brink of a financial crisis that risked damaging the wider economy, said experts.

The contractor was barred from receiving new state contracts altogether after one of its cranes toppled into Makkah’s Grand Mosque during a storm, killing 107 people. 

Facing a severe cash squeeze, it has been forced to halt work at a string of projects and lay off thousands of staff. But the government has taken a more benign approach to SBG in the past three months, letting it resume bidding for new contracts and, according to banking and construction industry sources, making some long-overdue payments to the group.

This has helped the firm pay salaries to some 10,000 workers, secure a SR2.5 billion ($667 million) loan from local banks, repay bondholders and resume work at some stalled projects. SBG resumed work at the Jeddah airport in early June and repaid holders of a SR1 billion ($267 million) Islamic bond maturing late that month. The company has hired about 30 finance and management professionals from overseas and drawn up a new business plan. An SBG spokesman said it had finished laying off and compensating about 70,000 foreign workers, reducing staff numbers from about 200,000 over the past several months.

• Midyan plant set for year-end launch
• $1.2bn East Gate to house 7,000 villas
• SBG pulls back from brink
• Posco E&C eyes $2.9bn projects
• Update
• Acwa JV breaks ground on $2.1bn gas complex
• Royal HaskoningDHV wins logistics park deal
• First indoor snow theme park opens
• ThyssenKrupp wins metro contract

Tags

Cranes & Hoists Security & Safety Pipes Fixings Cables Facilities Management Turkey Legally Bound Editorial Calendar - 2016 Regional News Saudi Focus UAE Focus Events Diary of events Contractors Real Estate Interiors Tenders Manufacturers & Procurement

Gulf Construction is the undisputed leading trade journal for the building and construction industries of Saudi Arabia and the other Gulf states. The magazine provides editorial coverage on a wide range of topics which are of interest to industry professionals. In addition, regular features highlight technological developments within specific industry fields. Launched 40 years ago, the magazine has established an enviable reputation as an authoritative, respected journal with unmatched coverage of the Gulf region. Gulf Construction is essential reading for anyone with a serious interest in the region’s building and construction industry.