Saudi Binladin Group Receives Financial Support from Ministry of Finance
In a bid to stabilize its financial structure, Saudi construction company Binladin Group is set to receive support measures from the Ministry of Finance.
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 financial backing is expected to enhance Binladin Group’s capacity to complete its ongoing projects, particularly those related to the Two Holy Mosques, as reported by the Saudi Press Agency.
Government Support to Boost Project Completion
The Ministry of Finance’s support will not only strengthen the company’s position but also enable it to secure the necessary financing for executing various contracted projects.
This initiative aligns with the government’s recent support extended to the construction and building sector, aiming to facilitate the completion of vital projects and create attractive investment opportunities in line with Saudi Vision 2030.
Challenges Faced by Binladin Group
Binladin Group, one of the largest construction companies in Saudi Arabia and the Middle East, has faced significant financial challenges in recent years due to a combination of factors.
These challenges include a slowdown in the construction sector, a decline in government contracts, and an economic downturn affecting the region, alongside legal and operational issues leading to delays in project completion and mounting debts.
Government Intervention and Potential Deal with PIF
The Saudi government intervened with support measures for the company, including a potential deal with the Public Investment Fund (PIF) to take a 36 percent stake in the construction giant.
While PIF did not offer an official response, reports indicated that the fund is working with Morgan Stanley on a potential deal to buy into Saudi Binladin Group.
Binladin Group’s Operations and Projects
Saudi Binladin Group operates in three categories – construction, power, and industrial – and has worked on numerous projects both domestically and globally.
In the construction sector, the group has undertaken projects such as expanding the Grand Mosque in Makkah and Al-Faisaliah Tower in Riyadh, as well as international initiatives like airports in Malaysia, Egypt, and the UAE.
In the power generation sector, Binladin Group has worked on projects like the Shoaiba Power Plant and Power Plant No.9, showcasing its expertise and capabilities in the industry.