Saudi Wealth Fund PIF Plans to Acquire Stake in Construction Giant Binladin Group
Saudi Arabia’s sovereign wealth fund is seeking to acquire a stake in the Kingdom’s biggest construction conglomerate as it leans on local firms to build key mega-projects and infrastructure needed to host showcase events such as the World Expo.
The Public Investment Fund is working with Morgan Stanley on a potential deal to buy into Saudi Binladin Group, according to people with knowledge of the matter. The PIF, as the $700 billion wealth fund is known, is considering acquiring part or all of the 36 per cent stake owned by the Ministry of Finance.
Spokespeople for Morgan Stanley and the PIF declined to comment. Representatives for Binladin couldn’t be reached for comment.
A deal with the PIF would come as Binladin seeks to recover from years of losses and reduce a debt pile of billions of dollars. Houlihan Lokey Inc. is advising on the restructuring of the firm and the Kingdom is hoping to turn the company into a national champion again capable of building the projects that are key to Crown Prince Mohamed Bin Salman’s ambitious economic reform plans.
Giga-projects
The PIF is playing an increasingly outsized role to help Saudi Arabia transition away from oil and is overseeing several giga-projects such as the $500 billion futuristic city of NEOM, and a luxury tourism development on the the Red Sea. Last year, the PIF spent $1.3 billion to acquire stakes in four local construction companies to bolster the kingdom’s domestic construction industry.
Binladin’s history has been intertwined with the kingdom’s since the country was founded in 1932. The company has played a key role in modernizing the country by building highways, airports and economic free zones, and is also known for its work in the Islamic holy cities of Mecca and Medina.
Binladin could now be key to the Kingdom’s plans to host events such as the World Expo exhibition in 2030 and the 2034 FIFA World Cup football, which will require huge infrastructure investments and the help of experienced builders.
