Saudi Oger’s plan to restructure SAR 13 billion ($ 3.5 billion) in debts received a fresh blow when a major creditor obtained a court order claiming its dues from the group, Reuters reported citing informed sources.
National Commercial Bank (NCB), Saudi Arabia's largest bank, has received a court order against Saudi Oger, following a similar move against the company by Samba Financial Group in July, the sources added.
“Their rejection of a so-called standstill requested by Saudi Oger on the money it owes to Saudi banks puts the whole process in doubt as the company would only seek to press ahead with a deal if all banks agreed to the request”, the sources said.
A standstill would allow Saudi Oger to move forward with one of the biggest debt restructuring deals in the Gulf in recent years, giving it more time to collect its dues from the government.
The construction giant and the two Saudi banks were not available for comment, Reuters said.
According to the sources NCB had started the legal action during the last few weeks in a court in Jeddah, where the bank is headquartered.
The orders mean that Saudi Oger has to repay Samba and NCB or it will face the risk of seizing and selling.
The construction group, which is owned by the family of Lebanese Prime Minister-designate Saad al-Hariri, has been hit by a decline in government spending after a drop in oil prices.
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