Saudi Binladin seeks extension on Grand Mosque loan: report

Saudi Binladin Group (SBG), the kingdom’s biggest contractor, has requested a second extension on a SAR 817 million ($217.9 million) Islamic loan being used to finance construction at the Grand Mosque in Makkah, sources familiar with the matter told Reuters. 

Negotiations to delay the repayment– originally due to mature July 15– came after the Saudi government was unable to fully reimburse the firm for work on the mosque, the unnamed sources said.

This is the second time SBG has requested an extension, having previously asked for one on August 31. It is uncertain how long this extension will be, two of the people said, but one said it could be until December.

The loan– which is a Murabaha facility– was from a consortium of eight to nine lenders, mainly from the United Arab Emirates. The facility was led by Dubai Islamic Bank, and included Emirates NBD. Noor Bank and Ajman Bank were also participating, the sources said.  

In July, sources told Reuters that SBG was owed SAR 1.071 billion in approved payments for work completed on the Grand Mosque up until December last year, which the Saudi government was yet to pay. 

The contractor has also filed a further SAR 1.3 billion of claims for work covering the first four months of 2016, for which approval is still pending, they added.

The kingdom has paid the construction firm a small portion of the sum owed prior to the Eid al-Adha break this month, but a large amount is still outstanding, two of the sources said. 

SBG has been hard hit by the Saudi government’s spending cuts after oil prices began to plunge in 2014. The contractor was also temporarily banned from bidding on new projects after a crane collapsed at the Grand Mosque last year, killing 107 people.

Even after the suspension was lifted in May, the company has struggled with an estimated debt of $30 billion owed to local and international banks.