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Saudi Banks Acquire 80% of Debt Burdening Construction Firm ‘Binladin’

Saudi Banks Acquire 80% of Debt Burdening Construction Firm ‘Binladin’
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Saudi Banks Acquire 80% of Debt Burdening Construction Firm ‘Binladin’

Saudi Banks Acquire 80% of Debt Burdening Construction Firm ‘Binladin’

The Binladin International Holding Group, one of the Middle East’s biggest construction companies, is witnessing remarkable progress in its debt restructuring plans as reports revealed that Saudi banks acquired nearly 80% of the company’s debt.

Binladin’s CEO Khalid al-Gwaiz, in an interview with Al Arabiya TV channel, revealed that the company’s debt was not far from 33 billion riyals ($8.8 billion) and added that the ongoing restructuring process with lenders is the biggest in the Middle East.

Last week, the construction company held a virtual meeting with lenders to discuss a restructuring proposal approved by the company’s board that it said would align “stakeholder incentives to support the company.”

Gwaiz said lenders have indicated preliminary approval for the plan, according to the Al Arabiya report. He also said a formal initial agreement is expected in June, before details are finalized and documented by September or the fourth quarter.

Binladin, according to Gwaiz, has identified opportunities in the construction market in the Kingdom amounting to one trillion riyals by 2025.

These opportunities are mainly linked to government projects.

Binladin’s share of those mega projects will contribute to payback creditors, Gwaiz confirmed.

“Restructuring is vital for developing Binladin’s capacity for taking on mega projects,” Saudi economist Abdullah al-Malghouth told Asharq Al-Awsat.

He added that Binladin’s strategy goes to show that Saudi companies have begun to move in the right direction in terms of drafting organized, transparent and reliable strategies.

The kingdom’s laws aim to resolve any obstacle that could hinder the work of companies, Saudi legal consultant Faisal al-Khriji told Asharq Al-Awsat, adding the restructuring of debt is supported by Saudi regulations.

Last month, Binladin said it will offer creditors “several options to enhance their recoveries” by taking part in new company projects.

It said the plan would give the company a platform to grow, raise cash, fund new projects and launch a turnaround.

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Egypt Completes Trial Run of New Suez Canal Channel Extension

An Egyptian navy vessel see in the Suez Canal, March 30, 2021. (AFP/Getty Images)
An Egyptian navy vessel see in the Suez Canal, March 30, 2021. (AFP/Getty Images)
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Egypt Completes Trial Run of New Suez Canal Channel Extension

An Egyptian navy vessel see in the Suez Canal, March 30, 2021. (AFP/Getty Images)
An Egyptian navy vessel see in the Suez Canal, March 30, 2021. (AFP/Getty Images)

Egypt said on Saturday it had successfully tested a new 10 km channel near the southern end of the Suez Canal.

The Suez Canal Authority said in a statement that during a trial run two ships passed through a new stretch of the canal's two-way section without incident.

Following the 2021 grounding of the container ship Ever Given that blocked the vital waterway for six days, Egypt accelerated plans to extend the second channel in the southern reaches of the canal and widen the existing channel.

Its revenue from the waterway, the gateway to the shortest route between Europe and Asia, has nevertheless tumbled since Yemen's Houthi militias began attacking ships in the Red Sea in November 2023 in what they say is solidarity with Palestinians in Gaza.

Egyptian President Abdel Fattah al-Sisi said on Thursday that due to "regional challenges", the country had lost approximately $7 billion in Suez Canal revenue in 2024, marking more than a 60% drop from 2023.

According to the Suez Canal Authority, the latest expansion extends the total length of the canal's two-way section to 82 km from a previous 72 km. The canal is 193 km long in total.

"This expansion will boost the canal's capacity by an additional 6 to 8 ships daily and enhance its ability to handle potential emergencies," the Suez Canal Authority said in its statement.

Earlier this year, Egypt said that it was considering an additional expansion project separate to the 10 km channel extension.