Saudi Binladin requests loan extension after Grand Mosque payment delay

Saudi Binladin Group (SBG) has asked for an extension on an SAR 817 million Islamic loan that matured last week, sources with knowledge of the matter told Reuters.

The loan, which was being used to finance work on the Grand Mosque in Makkah, was due to be paid off by July 15.

SBG, the kingdom’s largest contractor, is yet to be paid by the government for construction work on the mosque, prompting it to request for an extension on the loan payment, the sources said. 

The contractor and Dubai Islamic Bank – which originally helped arrange the Islamic loan – declined to comment, the agency reported.

SBG has been severely affected by public spending cuts and a temporary suspension from bidding on new state projects, after one of its cranes collapsed at the Grand Mosque last year, in an accident that killed 107 people.

Despite the payment delays and a criminal investigation into the incident, the contractor has continued to work on renovations at the mosque, the sources added.

Earlier this week, it was reported that SBG had repaid a SAR 1 billion Islamic bond that matured late last month. The payment, which was delayed by several weeks, used money from a SAR 2.5 billion loan the firm secured in May, Reuters reported citing banking sources.

According to bankers’ estimates, the company still owes a debt of around $30 billion.