BE2C2 Report — Saudi Binladin Group’s creditors have agreed to extend by two years a $1.1bn (SAR4bn) Islamic credit facility to pay for building work at the Kingdom’s Grand Mosque in Makkah, banking sources said, according to Reuters.
SBG, historically one of the heavyweights of the kingdom’s construction sector, has been struggling because of delayed payments.
Its plight has eased since the start of the year after the government settled some of that receivables.
Creditors have signed documents to extend by two years $1.1bn (SAR4bn) of the total $2.67 (SAR10bn) project finance facility it had drawn down, the sources said. The facility would be extended from the end of 2017 to the end of 2019.
The loan will now have a similar time frame as the completion of the mosque project, which has been delayed to allow the Saudi government to defer some of its spending plans.
The facility will carry a profit rate of about 7.5 per cent, sources told Reuters.
Nobody was immediately available to comment from SBG.
The conglomerate has been involved in many major infrastructure developments in recent years, but like other large contractors it has been hit by a stalling of projects and delayed payments as the government has curbed spending due to weaker oil prices.
Dubai Islamic Bank was the lead bank on the facility, with other banks mainly UAE-based including NBD and Noor Bank, the sources said, with one adding that Ajman Bank, Union National Bank and Mashreq were also involved.
Grand Mosque in Makkah Extension
The project will increase the Grand Mosque’s capacity to 107,000 worshippers inside the Mataf in one hour.
It will also improve the level of services with the installation of the latest technologies.
In July 2015, Custodian of the Two Holy Mosques King Salman launched five projects as part of the third phase of expanding the Grand Mosque.
The expansion projects comprise the King Abdullah Expansion Structure; courtyards; tunnels; buildings for service facilities; and, the first ring road.
The development is touted to be the “project of the century.”
The late King Abdullah had laid the foundation stone for the expansion of the Grand Mosque at a ceremony held in Makkah on 19 August, 2011. The King Abdullah Expansion Project is estimated to cost over $26.6bn (SAR100bn).
The expansion covers an area of 456,000 sq meter and is expected to accommodate up to 1.2 million further worshippers.
Courtyards of the expanded mosque alone are expected to house at least 250,000 worshipers.
$3.5bn Abraj Kudai Development in Makkah
Complementing expansion of the Grand Mosque is the Abraj Kudai Development program.
Consisting of 12 towers standing between 30 to 40 floors on top of a large podium and three basement floors, the Abraj Kudai Development will have approximately 10,150 residential units and hotel rooms.
The podium will have a bus station, a shopping mall, restaurants, food courts, a conference center and car parks. The project, developed by the Ministry of Finance is worth $3.5 billion and due for completion by the end of 2017.
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