Saudi BinLadin reportedly secures $667m bank loan
The contractor is said to have pledged land as collateral for the loan, provided by Arab National Bank and Saudi British Bank, that could cover SBG's workforce costs
Saudi BinLadin Group (SBG) has reportedly secured a $666.5m (SAR2.5bn) loan from local banks as it looks to consolidate its fluidity.
Arab National Bank and Saudi British Bank are said to be providing the loan.
Two sources close to the matter said SBG has pledged land as collateral for the loan.
Details about the land's size or location, or the loan's tenure, were not disclosed.
SBG is expected to use this amount to cover redundancy costs for workers it is laying off, unpaid salaries, and severance costs, sources told Reuters.
A source told Reuters that the inclusion of the collateral was due to doubts about the health of Saudi's construction sector.
"Nobody in their right mind would lend unsecured at the moment to a contractor," said a banker, who chose to remain anonymous.
The loan is also likely to boost SBG's financial position, which has taken a hit due to dwindling crude values and delayed contractual payments.
Arabian Business, citing Reuters, reported Gulf commercial bankers said they believe SBG owes local and international banks a total of about $30bn (SAR112.5bn).
SBG has not disclosed information about its financial situation.
In September last year, the Saudi government barred SBG from bidding for new state contracts after one of its cranes fell in Mecca's Grand Mosque during a storm, killing 107 people.
This bidding sanction, and a travel ban levied on SBG's top officials, were said to have been lifted earlier this month.