Saudi state expected to take 35% stake in Saudi Binladin Group

The Saudi government is expected to take a 35 per cent stake in construction giant Saudi Binladin Group (SBG) as part of a financial settlement with state authorities, sources told Reuters today.

The figure, which was previously unknown, was confirmed by four sources familiar with the matter.

It represents the total stakes of chairman Bakr Binladin and his brothers Saleh and Saad, all of whom were detained in an alleged “anti-graft” crackdown in November alongside scores of other businessmen, princes and officials, according to some of the sources.

A formal transfer of control has not yet taken place, causing prolonged uncertainty about the fate of the company two months after it announced that some shareholders might transfer part of their holdings to the state against outstanding dues.

Officials from SBG and the government were not immediately available for comment.

Read: Binladen Group could concede their shares to Saudi government

Family-owned SBG, which had more than 100,000 employees at its height, is the biggest builder in Saudi Arabia and is important in Riyadh’s plans for large real estate, industrial and tourism projects to help diversify the Kingdom’s economy beyond oil.

In February, sources told Reuters that SBG has been awarded a contract in a project to build palaces for the king, crown prince and other senior royals at NEOM, a huge new business zone on the Red Sea coast

Many have argued that Saudi’s campaign of arrests and current crackdown on its wealthiest nations is an attempt by the state, which has been badly affected by the sharp drop in petrol prices, to raise much needed funds.

Saudi Arabia has relied on petrol since it was first discovered in 1938. Black gold has made the country, and its rulers, one of the richest in the world, but that all crumbled as petrol prices dropped.

The arrests, it is hoped, will raise $100 billion for state coffers, critics have said. This has become more evident as princes were released from detention and their assets taken from them.