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'Saudi Binladin seeks extension for $217.8m loan'

The $217.8m loan, that matured last week, was being used to fund construction on Saudi Arabia's Grand Mosque site

NEWS, Business, Construction, Grand mosque, Grand mosque crane collapse, Saudi Arabia, Saudi binladin, SBG, Sbg bank loan, Sbg construction

Saudi Binladin Group (SBG) has reportedly asked for an extension on a $217.8m (SAR817m) loan that matured last week, sources have said.

The loan was being used to fund construction on Saudi Arabia's Grand Mosque site.

The request to delay the payment, originally due on July 15, was as a result of the Saudi government not yet reimbursing SBG for work carried out, the anonymous sources added.

According to Reuters, citing sources, SBG has $285m (SAR1.07bn) of approved payments on work completed on the project up until December 2015, which are still outstanding.

The company has filed a further $346m (SAR1.3bn) of claims for work covering the period January-April 2016 - for which approval is still required.

In lieu of these payments being made, SBG has asked Dubai Islamic Bank and the consortium of around 8-9 lenders to accept an extension to August 31 on the murabaha facility.

Two sources said the lenders who provided the murabaha were mainly from the UAE - including Emirates NBD, Noor Bank and Ajman Bank. 

It is understood that the banks are likely to agree to the extension - given the prominence of the project and the likelihood of repayment being made.

SBG and Dubai Islamic Bank - who originally helped arrange the loan - have both declined to comment, Reuters reported. 

Over recent months, SBG has been hit by government spending cuts and its ban from receiving new contracts following the deaths of 107 people after a crane toppled at Mecca's Grand Mosque last year.

Just last week, it was reported that suspects including engineers and two government employees are set to face trial over the crane incident. 

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Construction Week - Issue 749
Sep 15, 2019