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Saudi Oger owes over $10bn, but has only some $46,000 in its bank account

Court proposes Saudi Oger pays back 1% of what it owes creditors

The accumulated debts of now-liquidated construction giant Saudi Oger to be at more than SR40 billion More than 6,000 people had approached the court demanding it to intervene to get their dues from the company paid The company also owed the government SR38 billion

So now we know how much Saudi Oger owes, but how much of it will be paid back remains a mystery, although a 1% settlement per creditor was proposed.

Riyadh court issues OGER debt estimate 

The Executive Court in Riyadh has estimated the accumulated debts of now-liquidated construction giant Saudi Oger to be at more than SR40 billion (Around $10.8bn), according to the Saudi Gazette (SG).

“The amount includes SR22 billion owed to suppliers and SR2.6 billion owed to employees in outstanding dues such as delayed salaries and allowances, end-of-service awards and other entitlements,” according to court sources, SG reports.

“They said the amount of money kept in the court's custody only amounted to SR83.7 million while the company's bank account only had a balance of SR171,000 (around $46,000).

According to the sources, more than 6,000 people had approached the court demanding it to intervene to get their dues from the company paid, in addition to a number of banks and private companies.

“The sources said as the creditors could not agree to an amicable settlement, the court appointed a liquidator to wind up operations of the company. The settlement proposed by the court was to pay each creditor 1% of his or her outstanding dues,” SG said.

 The sources said the company also owed the government SR38 billion.

Restructuring of debt started in 2018

Reuters reported last April 2018, that Saudi Arabia was setting up a committee to handle the restructuring of debt owed by Saudi Oger, a company Reuters said was crippled by state spending cuts, mismanagement and corruption, leaving thousands of workers and banks out of pocket.

At that time, Saudi banks owed around 13 billion riyals ($3.5 billion) in debt and were under pressure from the regulator to provision for their exposure.

The Saudi construction sector went through a massive upheaval when oil prices dropped  and lead to project delays.

The number one construction company Saudi Binladin Group, feel off the radar screen when Bakr bin Laden was detained in an anti-graft crackdown in November 2017.

Reuters wrote that three Bin Laden brothers, senior executives in the family firm, were among more than 200 businessmen, royals and officials detained in November 2017 in an anti-corruption drive. Bakr and two of his brothers, Saleh and Saad, eventually transferred their combined 36.2% stake in the family firm to the state in April 2018

But the company which now has been beneficiary of recent government funds is back and tasked to develop portions of the $500bn NEOM project off the Red Sea. No such luck for OGER.

Image courtesy of Reuters