Saudi Binladin receives multi-billion dollar government loans-sources
By Tom Arnold and Hadeel Al Sayegh
DUBAI, April 17 (Reuters) - Saudi Arabia's finance ministry
has provided Saudi Binladin Group with loans of around 11
billion riyals ($2.9 billion) to help turn around the fortunes
of the construction giant, people familiar with the matter said.
The money will be used to prioritise work on projects deemed
key to the government, as well as to pay staff and creditors,
the people said, with one adding that further cash transfers
from the government are possible in the near future.
Binladin, which had over 100,000 employees at its height, is
the biggest builder in the country and crucial to Riyadh's plans
to develop property, industrial and tourism projects to help
diversify the economy beyond oil.
Chunks of the vast tracts of land owned by the Binladin
family will act as security for the loan, said the people,
although Reuters was unable to verify whether it was in return
for a government stake in the company.
The Ministry of Finance and Saudi Binladin Group did not
immediately respond to Reuters' request for comment.
The Saudi government is expected to take a significant stake
in the company as part of a financial settlement with state
authorities after chairman Bakr Binladin and his brothers Saleh
and Saad were detained in an anti-graft crackdown in November
alongside scores of other businessmen, princes and officials.
Sources told Reuters in March that the Saudi government was
expected to take a 35 percent stake in the construction giant.
The shake-up of the company's ownership is the latest
obstacle Binladin has faced after being shaken in recent years
by stalled projects and delayed payments as the government
tightened its budget in response to lower oil prices, as well as
a temporary exclusion from new state contracts after a crane
accident killed 107 people at Mecca's Grand Mosque in 2015.
Top of the list of projects the money will go towards
completing will be King Abdullah Financial District in Riyadh,
the kingdom's new financial centre, which the government needs
to be ready in time for Saudi Arabia to host the G20 Summit in
Other key projects are major religious tourism developments,
such as expanding facilities and surrounding infrastructure at
Islam's holiest mosques in Mecca and Medina.
The money will also go to repaying staff owed wages as a
result of payments delays caused by a slump in the construction
industry, the sources said.
Bank creditors will also be a priority for payment, with
Ministry of Finance officials visiting some banks in recent
weeks to reasure them that the company's future was bright after
the government intervention.
($1 = 3.7501 riyals)
(Additional reporting by Marwa Rashad; Editing by Adrian Croft)
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