Binladin Group secures loan from local banks

Saudi Binladin Group (SBG) has secured a SAR 2.5 billion ($667 millin) loan with a group of local banks by using its properties in Mecca and Jeddah as collateral, MEED reported, citing banking sources with knowledge of the matter.

Saudi British Bank (SABB) and Arab National Bank are said to be leading the group and the agreement will be signed shortly.

SBG declined to comment on the transaction, MEED added.

The Jeddah-based construction company recently laid off nearly 80,000 workers and has faced protests from employees seeking late salary payments. The funds will be used for end of service dues and to regularize salaries for staff, the sources said.

News of the deal comes less than a week after Saudi Arabia’s labor minister Mufrej Al Haqbani said the crisis will be resolved, with some workers being paid this month, and some the next.

SBG approached banks roughly a month ago seeking a SAR 5 billion facility, but was only able to secure SAR 2.5 billion from a small group of lenders.

The assets used as guarantee are worth between SAR 7 billion and SAR 9 billion, the sources said, adding that banks took 250 percent coverage on the loan to reduce exposure by SBG.

Last week, the company’s ban on receiving government contracts, which came after a crane accident in 2015 at Makkah’s Grand Mosque, was lifted by King Salman.