Samba stymies Saudi Oger debt talks

RIYADH: Saudi Arabia’s Samba Financial Group rejected a proposed payment freeze by construction firm Saudi Oger, blocking negotiations between the company and lenders over 13 billion riyals (RM15.4 billion) of debt.

The bank had started legal action to secure repayment of the debt after rejecting a so-called standstill agreement, said sources.

The accord would have prevented creditors from taking legal action against the company while it negotiated terms.

Saudi Oger had been seeking to extend the maturity of the loan while it tried to recover delayed government payments, they said.

Saudi Arabia halted payments to contractors after the oil slump pressured the government’s finances, creating financial problems for the country’s largest construction firms.

The construction company, owned by Lebanese Prime Ministerdesignate Saad Hariri’s family, had been seeking to sell a 20 per cent stake in Jordan’s Arab Bank to Saudi Arabia’s Fawaz Al Hokair Group, said people with knowledge of the matter last month.

The family has also begun talks to sell a stake in its Dubai-based telecommunications provider after missing a payment on a US$4.75 billion loan, they said.

Spokesmen for Samba and Oger didn’t respond to requests to comment.

Saudi Arabia said last month it would settle all delayed payments to private businesses by year-end as it concluded a review of government projects.

The payment announcement followed the kingdom’s US$17.5 billion bond sale in October, the largest from an emerging-market nation.