Binladin Group on its way to fiscal health, say experts
Construction giant has formed an expert finance and management team to draw up a financial recovery plan
Saudi Binladin Group, the construction giant which has been in the news in recent times for its cash woes and labor troubles, is on its way back to financial health.
An Arab News report quoting experts said the government has stepped in and allowed the construction major to bid for new projects over the last three months.
Besides, Saudi banks - Arab National Bank and Saudi British Bank – have given long-term loans totaling $666.75 million enabling payment of salaries for the company's 10,000-strong workforce, reimbursing its bond amount and restarting suspended projects, among them the King Abdulaziz Airport in Jeddah in June.
Saudi Binladin has also formed an expert finance and management team to draw up a financial recovery plan, said the report.
The company’s woes began following the fall in oil prices resulting in government spending cuts and by its suspension from receiving new state contracts since September last year, when a crane accident killed 107 people at the Grand Mosque in Makkah – considered to be Islam’s holiest site and a key project for the firm. The ban on the company was lifted in May.
The drastic liquidity crunch had forced the Binladin Group to stop work on a series of projects and reduce its roster of employees and workers.
Reducing the number of workers is a positive step, according to bankers. However, the group is still under pressure and has sought a loan of $217.8 million last week to be used for financing construction work on the Grand Mosque.
Nonetheless, commentators have said that the company, nonetheless is moving forward and is “on a promising path.”