02 Aug 2024
RIYADH: Saudi construction company Binladin Group is set to receive several support measures from the Ministry of Finance to help stabilize its financial structure.
The ministry announced a series of arrangements to settle the firm’s cash dues to banks, which include lending to the group and considering an increase in the government’s stake.
The support is expected to enhance Binladin Group’s capacity to complete its ongoing projects, particularly those related to the Two Holy Mosques, the Saudi Press Agency reported.
The financial backing will also strengthen the company’s position and enable it to secure the necessary financing for executing various contracted projects.
The Ministry of Finance said the initiative continues the government’s recent support extended to the construction and building sector.
Such measures are intended to facilitate the completion of vital projects and create attractive investment opportunities in the sector, in line with Saudi Vision 2030.
The Binladin Group, one of the largest construction companies in Saudi Arabia and the Middle East, has faced significant financial challenges in recent years.
These difficulties stem from a combination of factors, including a slowdown in the construction sector, a decline in government contracts, and an economic downturn affecting the region.
The firm’s financial woes were compounded by legal and operational issues, which led to delays in project completion and mounting debts, prompting the Saudi government to intervene with support measures.
The company faced operational challenges and legal issues, such as the crane collapse incident at the Grand Mosque in Makkah in 2015, which further strained its financial and reputable standing.
Reports about government intervention were also brought to light in February as the Public Investment Fund was set to take a 36 percent stake in the construction giant.
While PIF did not offer an official response to the report, Bloomberg, citing people with knowledge of the matter, said the fund is “working with Morgan Stanley on a potential deal to buy into Saudi Binladin Group.”
Saudi Binladin Group operates in three categories, including construction, power, and industrial.
On the construction side, the group has worked on more than 15 building projects in the Kingdom, including expanding the Grand Mosque in Makkah and Al-Faisaliah Tower in Riyadh.
The group’s global initiatives include Malaysia’s Kuala Lumpur Airport, Sharm El-Sheikh Airport in Egypt, and the UAE’s Sharjah International Airport and Fujairah International Airport.
In the power generation sector, Binladin Group worked on the Shoaiba Power Plant and Power Plant No.9, also known as PP9, which generates a capacity of 5,980 megawatts and was built on an area of 3.2 million sq. meters.