Saudi Oger seek­ing buy­ers for $1bn Arab Bank stake

Kuwait Times - - BUSINESS -

Saudi Oger has be­gun talks with po­ten­tial buy­ers for its 20.93 per­cent stake in Arab Bank in a deal that could raise about $1 bil­lion for the em­bat­tled con­struc­tion gi­ant, sources aware of the mat­ter told Reuters. Oger was one of two large Saudi con­trac­tors charged with im­ple­ment­ing the king­dom’s grand in­fra­struc­ture plans be­fore the fall in oil prices and con­se­quent state spend­ing cuts left the com­pany fac­ing a multi­bil­lion-dol­lar debt re­struc­tur­ing to stave off col­lapse.

A small num­ber of po­ten­tial buy­ers from Saudi Ara­bia and the wider Mid­dle East have started ne­go­ti­a­tions, five sources said on con­di­tion of anonymity be­cause the in­for­ma­tion had not been made pub­lic. A spokesman for Saudi Oger, which is owned by the fam­ily of for­mer Le­banese Prime Min­is­ter Saad Hariri, did not respond to re­quests for com­ment. Hariri’s po­lit­i­cal of­fices in Beirut said it was a mat­ter on which only Saudi Oger could com­ment.

Among the in­ter­ested par­ties vy­ing for the Arab Bank stake is Saudi Ara­bia’s Al-Hokair fam­ily, two Gulf-based sources said. The fam­ily is best known for its Fawaz Al-Hokair fash­ion re­tail busi­ness, the Mid­dle East­ern fran­chisee for brands in­clud­ing Zara and Ba­nana Repub­lic, but also has in­ter­ests in real es­tate and hos­pi­tal­ity, as well as fi­nance and in­vest­ments through its FAS Cap­i­tal arm.

Man­ag­ing Direc­tor Ab­dul­magid Al-Hokair did not respond im­me­di­ately to calls and a text mes­sage. One pos­si­ble buyer has con­tacted banks about rais­ing be­tween $700 mil­lion and $1 bil­lion to fi­nance a bid, said one of the Gulf sources and two other sources. They de­clined to name the po­ten­tial bid­der. A spokesman for Arab Bank, which has op­er­a­tions across the Mid­dle East and a to­tal of 600 branches on five con­ti­nents, did not respond im­me­di­ately to a re­quest for com­ment.

DIS­TRESSED SELLER

Oger’s stake is the largest sin­gle hold­ing and would be worth about 815.4 mil­lion di­nars ($1.15 bil­lion) at Thurs­day’s clos­ing price, Reuters cal­cu­la­tions show, though the sec­ond Gulf-based source said the fi­nal price is ex­pected to be lower be­cause of Oger’s sta­tus as a dis­tressed seller. The pro­ceeds would be a “drop in the ocean” in re­la­tion to Oger’s debts, the fifth source said, though they could cover a $1.03 bil­lion loan with re­gional and in­ter­na­tional banks that is due to ma­ture in Fe­bru­ary. Oger owes about 15 bil­lion riyals ($4 bil­lion) to banks, plus bil­lions more to con­trac­tors, sup­pli­ers and em­ploy­ees, sources told Reuters last month.

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