RIYADH: Saudi Arabia’s Samba Financial Group rejected a proposed payment freeze by construction firm Saudi Oger, blocking negotiations between the company and lenders over 13 billion riyals (Dh12.75 billion; $3.47 billion) of debt.
The Riyadh-based bank has started legal action to secure repayment of the debt after rejecting a so-called standstill agreement, the people said, asking not to be identified as the information is private. The accord would have prevented creditors from taking legal action against the company while it negotiated terms.
Saudi Oger had been seeking to extend the maturity of the loan while it tried to recover delayed government payments, the people said. Saudi Arabia halted payments to contractors after the oil slump pressured the government’s finances, creating financial problems for the country’s largest construction firms. The construction company, owned by Lebanese Prime Minister-designate Sa’ad Hariri’s family, had been seeking to sell a 20 per cent stake in Jordan’s Arab Bank to Saudi Arabia’s Fawaz Al Hokair Group, people with knowledge of the matter said last month.
The family has also begun talks to sell a stake in its Dubai-based telecommunications provider after missing a payment on a $4.75 billion loan, people with knowledge of the matter said in October. Hariri said in October he “hopes” the company will survive.Spokesmen for Samba and Oger didn’t respond to requests to comment.
