Saudi Arabia

Saudi Binladin Group plans to hire more advisers to accelerate one of the Middle East’s biggest corporate-debt revamps and tackle its estimated $15 billion debt pile, Bloomberg News reported. The kingdom’s top builder reached out to restructuring specialists across the Persian Gulf to assist with reorganizing the business, a spokesman for Jeddah-based SBG said in a text message. The consultants will assist Houlihan Lokey Inc., which was appointed in April to manage the group’s turnaround.

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Saudi Arabia’s economy will shrink by 6.8% this year, the International Monetary Fund (IMF) said on Wednesday, a sharper decline than the 2.3% contraction estimated in April, as low oil prices and the coronavirus pandemic hit the kingdom hard, Reuters reported. In an update of its April World Economic Outlook forecast, the IMF said it now expects a deeper global recession in 2020 and a slower recovery in 2021, as the coronavirus crisis intensifies in many emerging and developing countries.

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Saudi Binladin Group failed to pay thousands of employees as the construction giant reels under the impact of coronavirus and restructures about $15 billion of debt, Bloomberg News reported. The conglomerate missed some salary payments in April and May, according to people with knowledge of the matter. It’s not clear yet whether the company, which employs about 100,000 staff, will be able to pay those employees in June, the people said, asking not to be identified due to the sensitivity of the matter.

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Saudi Arabia unveiled a $13.3 billion stimulus package to protect banks against an expected drop in profits and rise in bad loans as they confront the double whammy of the coronavirus shock and lower oil prices, Bloomberg News reported. The move by the central bank, the Saudi Arabian Monetary Authority, will help lenders amend and restructure loans, without additional fees, and support private sector employment and credit. It follows a 50-billion-riyal ($13.3 billion) program in March to help banks provide loans to businesses so companies didn’t have to cut jobs.

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Saudi Arabia’s Binladin Group has cut thousands of jobs and reduced staff salaries between 30% to 70% as the coronavirus outbreak hurts business of the kingdom’s biggest construction company, three sources familiar with the matter said, Reuters reported. The sources declined to be identified and the company did not respond to an email request for comment.

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Saudi Arabian banks may pay the biggest price among their regional peers as the kingdom escalates an oil-price war, Bloomberg News reported. Lenders in the world’s largest oil exporter, already dealing with a fragile economy, now have to contend with plummeting crude prices -- which could lead to more problem loans -- and the fallout of the coronavirus that’s closed the kingdom’s schools and limited cross border movement. A surprise interest rate cut last week also means profit margins are under pressure.

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BNP Paribas SA and Citigroup Inc. are among global banks with the most exposure to about $14 billion of accepted claims related to the collapse of two Saudi business empires more than a decade ago, Bloomberg News reported. The French bank is owed about $750 million by Maan al-Sanea’s Saad Group and Ahmad Hamad Algosaibi & Brothers Co. -- two family holding companies that defaulted on roughly $16 billion in 2009 -- after a Saudi court accepted its claims, according to documents seen by Bloomberg. The U.S. bank is owed about $270 million by Saad Group, the documents show.

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Saudi Aramco shares have dropped more than 10 per cent from their peak as the Kingdom’s markets have been hit by growing jitters over the deteriorating situation in the Middle East following the US assassination of a top Iranian military commander, the Financial Times reported. The state oil company’s shares fell 1 per cent on Monday following a 1.7 per cent fall on Sunday. The slump has left Aramco’s shares trading at 34.2 riyal, the lowest level since the group floated on Saudi Arabia’s stock bourse last month.

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Saudi Arabia’s biggest construction company overhauled its top management, delaying plans to appoint an adviser for a proposed $15 billion debt restructuring, people familiar with the matter said, Bloomberg News reported. Saudi Binladin Group’s previous chairman and managing director left within months of being appointed, the people said, asking not to be identified because the matter hasn’t been made public. The company also named four new directors to its board this week, they said.

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Saudi Arabia is closely monitoring how much banks are lending to local investors rushing to buy shares in Aramco and what impact the mammoth offering will have on the kingdom’s financial sector, Bloomberg News reported. The Saudi Arabian Monetary Authority wants daily updates on how much credit banks are providing after it eased lending limits for buyers, according to people with knowledge of the matter.

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