Monday 5 August 2024

#Saudi s May Raise Stake in Top Builder to Support Economic Rejig - Bloomberg

Saudis May Raise Stake in Top Builder to Support Economic Rejig - Bloomberg

Saudi Arabia’s government may increase its stake in a struggling construction conglomerate that’s seen as key to the country’s trillion-dollar economic transformation plans.

The ministry of finance is weighing a series of measures to stabilize Saudi Binladin Group’s financial structure, according to a statement. That could include helping pay off dues to banks, lending to the firm, and even potentially increase the government’s stake.

Riyadh currently owns just over a third of Binladin, a firm that’s seeking to recover from years of losses and reduce a debt pile of billions of dollars. The kingdom hopes to turn it into a national champion again, capable of building projects key to Crown Prince Mohammed bin Salman’s ambitious plans.

The government said its move is a continuation of the support the construction sector has received in the past, according to the statement. It will enhance Binladin’s ability to complete projects, including the Two Holy Mosques, and potentially help secure financing required for other developments.

Binladin has been working with Houlihan Lokey Inc. on a restructuring and its history has been intertwined with the kingdom’s since Saudi Arabia was founded in 1932. The company helped modernize Saudi Arabia by building highways, airports and freezones. It’s also known for its work in the Islamic holy cities of Mecca and Medina.

The firm could now be key to the kingdom’s plans to host events such as the World Expo exhibition in 2030 and the 2034 FIFA World Cup football, which will require huge infrastructure investments and the help of experienced builders.

The Public Investment Fund is working with Morgan Stanley on a potential deal to buy into Binladin, Bloomberg News has previously reported. The $925 billion PIF is considering acquiring part or all of the 36% stake owned by the ministry of finance, people familiar with the matter said earlier this year.

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