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Saudi Binladin Hires Investment Advisor, CEO as It Plans $15 Bln Debt Restructuring

SoDATA — Saudi Binladin Group (SBG) has hired an investment bank to advise on its $15 billion debt rescheduling plan.

Bloomberg reported, citing a statement from Binladin International Holding Group, that Houlihan Lokey Inc., a Los Angeles based multinational independent investment bank and financial services company, will assist in a comprehensive review and financial restructuring of SBG’s capital structure.

The announcement comes as SBG, one of the kingdom’s biggest construction companies, appointed Khalid Al Gwaiz chief executive officer to push ahead with its restructuring.

Al Gwaiz joined the company, formerly known as Saudi Binladin Group, in March, according to an internal announcement, Bloomberg reported.

The restructuring plans pf the regions one of the largest privately-held firm coincide with A) historic turmoil in the global oil market which has dented the kingdom’s oil revenues based budget, and B) impact of the Coronavirus pandemic.

The pain felt by the tourism, retail, hospitality and logistics sectors due to global travel disruptions and closure of most public venues is spreading to the contracting and oil services industries in the Arab world’s biggest economies mainly Saudi and UAE.

Last week, the Kingdom announced suspension of work on the third phase of a $100 billion expansion of the Grand Mosque in Mecca over coronavirus fears. SBG is the main contractor on the mega project.

Binladin, which is also constructing the $1.23 billion tallest building in the world, Jeddah Tower in the kingdom’s commercial capital Jeddah, aims to reorganize its assets into sector-led businesses, streamlining operations, and ramping up activities across key projects and businesses.

For decades the group has been Saudi Arabia’s go-to developer for mega-projects such as airports and religious sites. It took a financial hit after one of its cranes at the Grand Mosque in Makkah collapsed in September 2015 and the government banned it from taking on any new projects.

That ban was lifted in May 2016, and the government took a stake of about 36 percent in the company from the Binladin family in 2018 to settle allegations of corruption.

The contractor’s top management has been overhauled several times since then.