Saudi Binladin Group said to repay SAR 1 bln sukuk

Saudi Binladin Group (SBG) has repaid a SAR 1 billion Islamic bond that matured late last month, a sign that the financial woes of the kingdom’s largest contractor may be easing, Reuters reported citing unnamed banking sources.

The payment, which was delayed by several weeks, used money from a SAR 2.5 billion loan the firm secured in May, sources said. 

A company spokesman declined to comment on SBG’s financial situation, the agency reported.

SBG issued the SAR 1 billion Islamic bond with a 364-day tenor in late June last year, priced with a profit rate of 2.5 per cent. The bond was to be used to meet costs arising from the contractor’s work at the King Abdul Aziz International Airport in Jeddah.

SBG has been hard hit by a liquidity crunch due to lower oil prices, which have resulted in a slowdown in Saudi Arabia’s construction sector amidst public spending cuts and delayed payments.

The contractor was further impacted severely by a government-imposed ban that prevented it from bidding for new state projects last September, after one of its cranes collapsed at the Grand Mosque in Makkah, killing 107 people.

The crisis forced SBG to stop work across several projects and delay wages to its workers, which prompted protests in the kingdom.