Bankers and economists praise contractor’s efforts to stave off economic disaster
Saudi Binladin Group (SBG), the biggest construction company in Saudi Arabia, is on the road to recovery after a period of economic turmoil, experts have said.
The company’s recovery has been aided by the government making long-overdue payments to the group, banking and construction industry sources told Albawaba, the Jordanian news portal.
Following the decision by the Saudi government to lift a ban on the contractor bidding for new projects, the last three months have seen SBG resume bidding for new contracts. It has also secured a $667 million loan from Arab National Bank and Saudi British Bank, allowing it to pay salaries to some 10,000 workers, repay bondholders and resume work on stalled projects, such as the King Abdulaziz Airport in Jeddah.
SBG has also created a finance and management team to draw up a recovery plan, the report added. Executives from the company have been presenting this new business plan to creditors, with banking sources highlighting more modest growth and an increased focus on private-sector leisure projects and overseas business as key talking points.
In July of this year, the contractor said that it had asked for an extension on a $217.8 million loan, which was being used to fund construction on the Grand Mosque site in Mecca.
The firm said that it had requested for an extension following the maturation of the loan because it was not yet reimbursed for its construction work on the site, Reuters said at the time.
A company spokesman has said that it has now compensated 70,000 of its foreign workers after ending their contracts (out of a total of 200,000 workers), an Arab News report added.
The report also quoted bankers as saying that the reduction of workers was a positive step for the company. Despite the pressures over the Grand Mosque loan, commentators have said that they remain optimistic about the company moving forward.