Bloomberg reported that the Saudi Ministry of Finance appointed the Rothschild company to help oversee the restructuring of the Bin Laden Group, the largest construction company in the Kingdom.
According to people familiar with the matter, who asked not to be named, Rothschild’s appointment means that the restructuring process for the giant contractor, already started two years ago by US investment bank Houlihan Lockey, will require additional time to complete.
The Treasury did not respond to Bloomberg’s requests for comment. Rothschild and Houlihan declined to comment.
The bin Laden group is trying to recover from years of losses and reduce a pile of billions of dollars in debt. Last year, Houlihan outlined a roadmap for the company’s lenders to restore the company’s ability to build mega-projects that are central to the Saudi crown prince’s ambitious economic reform plans.
As a shareholder, lender and client of Bin Laden, the Saudi government has a central role in the restructuring process, having already loaned 20 billion Saudi riyals ($5.3 billion) to help stabilize the company and pledging to double this to help the group resume and complete vital projects in the two cities of Mecca The Holy City, according to Bloomberg.
The Bin Laden Group has played a major role in building most of Saudi Arabia’s infrastructure since the founding of the modern state in 1932. But it was not accepted by the government after a crane accident in Mecca in 2015.
The Golden Clock Tower in Makkah, owned by the Saudi government, is one of the most prominent projects of the Bin Laden Group. The project was built at a cost of 15 billion dollars and was completed in 2011. It includes seven towers of hotels and shopping centers and atop the Kaaba in Mecca, the holy city visited by millions of pilgrims every year.
Early last year, bin Laden’s lenders were considering hiring Rothschild to help them navigate the transition, Bloomberg reported.
In May 2020, informed sources told Reuters that the Binladin Holding Group was seeking a consultant to reduce costs as well as restructure the debts of the skyscraper complex in Mecca.
The move came as part of efforts to restructure the giant construction group after the government acquired a 35 percent share of the bin Laden family members who were exposed to the anti-graft campaign launched by Prince Mohammed bin Salman at the Ritz-Carlton Hotel in late 2017.
At the time, a spokesperson for the Saudi Ministry of Finance told Reuters, “We recognize and support the efforts of the Saudi Binladin Group’s board of directors to achieve greater efficiency in their operations and restructure their balance sheet to enable them to harness strength and excellence in execution to bounce back and excel as an important contractor and developer in the region and beyond.” .
Most recently, the Saudi wealth fund is considering investing hundreds of millions of dollars in four local contractors to support the kingdom’s local construction industry, Bloomberg reported.