Saudi government said to be in talks to buy out Oger

Saudi Arabia’s government is in talks to buy out construction conglomerate Saudi Oger, owned by the family of former Lebanese Prime Minister Saad Al-Hariri, Lebanese daily Al-Akhbar reported, citing unnamed sources.

Talks between the government and Hariri are in their final stages, the report said, adding that the buyer would assume responsibility for all debts and financial obligations owed by Saudi Oger– one of the kingdom’s largest contractors.

According to the newspaper, Hariri is negotiating to retain a 40 percent stake in Saudi Oger, in exchange for giving up some shares in Arab Bank.

However, the team representing the Saudi government – led by Crown Prince Mohammed bin Salman – is insisting on owning the company as a whole, if this is required to pay the debt.

According to the sources, Saudi Oger has assets worth $1.5 billion, with financial obligations amounting to around $4 billion (SAR 14.5 billion). This figure includes outstanding wages and severance pay, payments to subcontractors and suppliers, and loans from a number of local and international banks.

The company has been severely impacted by a wider slowdown in the kingdom’s construction sector in the midst of low oil prices. Public spending cuts have resulted in several projects being canceled or scaled down, and payments postponed.

Earlier this week, hundreds of the contractor’s employees protesting unpaid salaries were dispersed by police in Jeddah, Arab News reported.

Write to Jerusha Sequeira at jerusha.s@argaamnews.com