Saudi Binladin seeks extension on SAR 10 bln Grand Mosque loan

Saudi Binladin Group (SBG), the kingdom’s largest contractor, is negotiating with lenders an extension of up to two years on a SAR 10 billion ($2.7 billion) Islamic credit facility, Reuters reported, citing banking sources.

The syndicated facility was used to pay for building work at the Grand Mosque in Makkah, it was reported.

SBG has asked for the loan – which is due to mature by the end of this year – to be extended until the end of 2019 to match a new timeframe for the project’s completion, the sources said.

The facility being negotiated could have an early settlement clause, so the contractor can pay back creditors before the end of 2019 if it receives its dues from the government by then, they added.

The Grand Mosque expansion was delayed to allow the Saudi government to defer some of its spending plans, as well as due to changes to the project’s scope and some of its contractors, it was reported.

The project was set to be complete either this year or the next, Makkah mayor Osama bin Fadl Al-Bar told Reuters last September.

However, banking sources said the timeline for completion has now been delayed.

Saudi Arabia’s construction sector has been hit hard by project delays and late payments, as the government slashed spending in the wake of plunging oil prices.

SBG, in particular, was also affected by a temporary suspension from bidding for state contracts, after a crane collapse killed 107 people at the Grand Mosque in 2015.

The contractor’s latest talks with lenders follow earlier requests for an extension to repay part of the facility, a SAR 817 million Islamic loan.