Construction giant Saudi Oger has begun talks with potential buyers for the 20.93% stake in Arab bank it possesses in a deal that could raise about $1 billion.
Oger was one of the two large Saudi contractors charged with implementation of Saudi arabia’s infrastructure plans. However the fall in oil prices and the consequent state spending cuts left Saudi Oger facing a debt worth several billions of dollars.
A small number of potential buyers from Saudi Arabia and the wider Middle East have started negotiations. A spokesperson for Saudi Oger, which is owned by former Lebanese Prime Minister Saad Hariri and his family, did not respond to requests for comment. Managing Director Abdulmagid al-Hokair also did not respond immediately to calls.
One of the possible buyers has contacted banks about raising between $700 million and $1 billion to finance a bid according to sources close to the company. However the name of the bidder was not disclosed. Oger’s stake is the largest single holding and would be worth about 815.4 million dinars ($1.15 billion) at Thursday’s closing price, Reuters calculations show, though the second Gulf-based source said the final price is expected to be lower because of Oger’s status as a distressed seller.