Binladin receives multi-billion dollar govt loans, say sources

DUBAI, April 17, (RTRS): 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.