Arab Press

بالشعب و للشعب
Friday, Aug 22, 2025

Saudi construction firm Azmeel's creditors approve $2 billion debt restructuring

Creditors of Saudi Arabia's Azmeel Contracting Co, one of the kingdom's five biggest builders, have approved the restructuring of a 7.73 billion riyal ($2.06 billion) debt pile mainly through an issuance of perpetual Islamic bonds, its chief restructuring officer said on Friday.

Saudi Arabia's construction sector has faced myriad problems in recent years, with many firms falling casualty amid late payments from the government, rising costs and swings in oil prices that impact state-backed infrastructure projects.

About 88% of Azmeel's creditors, including 90% of banks and 75% of trade creditors, voted in favour of the restructuring plan, which will give them the option to sell their exposure in the secondary market should they choose to do so, Hisham Ashour, Azmeel's chief restructuring officer and managing director at Haykala Investment Managers, told Reuters.

In October 2019, Azmeel was one of the first Saudi companies to enter formal bankruptcy proceedings under a law that came into effect in 2018, part of broader Saudi plans to attract foreign investment

Azmeel's liquidity crunch came to a head in 2019 when clients, some government-related entities and some in the private sector, made late payments, Ashour said.

That led to accumulating debt that reached 7.73 billion riyals, including unpaid or late salaries and unpaid suppliers, and an equity deficit of 2 billion riyals. The company's workforce has shrunk to about 2,000 from about 35,000 in 2017-2018.

"The idea of a contracting company having tens of thousands of staff is not feasible anymore," Ashour said.

"The company is probably going to be looking at a model where they maintain project management and technical capabilities in-house and outsource and sub-contract as much as they can."

'STRICT COVENANTS'


The debt comprises 5.4 billion riyals in bank debt - of which 2 billion riyals are unfunded bank guarantees, 2.1 billion riyals in claims from trade creditors and 230 million riyals in employee and government dues.

It will be restructured through the issuance of 7 billion riyals in perpetual sukuk, about 92% of the total liabilities, with the remaining roughly 8% as "residual debt" - secured against Azmeel assets like equipment and real estate.

"It will have strict covenants to ensure company compliance with the terms of the restructuring plan," Ashour said.

The sukuk, for which a profit rate has yet to be determined, are expected early in the second quarter, Ashour said. Azmeel is in talks with Saudi lenders to arrange the deal.

The company envisions repaying the sukuk over 11 years, including a one-year grace period. About half of the planned sukuk will have personal guarantees.

"A cash sweep mechanism allows for excess cash to be used for earlier repayment," Ashour said, meaning any potential upside in the business could accelerate the timeline.

The restructuring appeals to banks as it gives them an option to exit while also clearing the company's balance sheet, allowing it to bid for new projects with a healthier credit standing.

Creditors with the biggest exposures include Arab National Bank, Alrajhi Bank, Banque Saudi Fransi, Saudi British Bank, Bank AlJazira, Saudi National Bank, Bank Albilad, Gulf International Bank and Emirates NBD, Ashour said.

King & Spalding advised Azmeel and Latham & Watkins advised the creditors on the restructuring.

"This will save jobs and will increase economic asset recovery for banks and shareholders. It's a win-win," Ashour said.

($1 = 3.7516 riyals)

Comments

Albert Mangaring 141 days ago
good day.

I'm Employee of Azmeel 2016 to 2018. i would to know if the saudi government, give to insturction to Azmeel the deadline for full payment of our Pinding salary?

Actualy i will waiting almost 8 years for our 6 months Pinding salary in Azmeel.

Newsletter

Related Articles

Arab Press
0:00
0:00
Close
Dogfights in the Skies: Airbus on Track to Overtake Boeing and Claim Aviation Supremacy
Tim Cook Promises an AI Revolution at Apple: "One of the Most Significant Technologies of Our Generation"
Are AI Data Centres the Infrastructure of the Future or the Next Crisis?
Miles Worth Billions: How Airlines Generate Huge Profits
Zelenskyy Returns to White House Flanked by European Allies as Trump Pressures Land-Swap Deal with Putin
Beijing is moving into gold and other assets, diversifying away from the dollar
Trump Backs Putin’s Land-for-Peace Proposal Amid Kyiv’s Rejection
Zelenskyy to Visit Washington after Trump–Putin Summit Yields No Agreement
Iranian Protection Offers Chinese Vehicle Shipments a Cost Advantage over Japanese and Korean Makers
United States Sells Luxury Yacht Amadea, Valued at Approximately $325 Million, in First Sale of a Seized Russian Yacht Since the Invasion of Ukraine
Saudi Arabia accelerates renewables to curb domestic oil use
Cristiano Ronaldo and Georgina Rodríguez announce engagement
Asia-Pacific dominates world’s busiest flight routes, with South Korea’s Jeju–Seoul corridor leading global rankings
Private Welsh island with 19th-century fort listed for sale at over £3 million
Sam Altman challenges Elon Musk with plans for Neuralink rival
Australia to Recognize the State of Palestine at UN Assembly
The Collapse of the Programmer Dream: AI Experts Now the Real High-Earners
Armenia and Azerbaijan to Sign US-Brokered Framework Agreement for Nakhchivan Corridor
British Labour Government Utilizes Counter-Terrorism Tools for Social Media Monitoring Against Legitimate Critics
WhatsApp Deletes 6.8 Million Scam Accounts Amid Rising Global Fraud
Texas Residents Face Water Restrictions While AI Data Centers Consume Millions of Gallons
India Rejects U.S. Tariff Threat, Defends Russian Oil Purchases
United States Establishes Strategic Bitcoin Reserve and Digital Asset Stockpile
Thousands of Private ChatGPT Conversations Accidentally Indexed by Google
China Tightens Mineral Controls, Curtailing Critical Inputs for Western Defence Contractors
JPMorgan and Coinbase Unveil Partnership to Let Chase Cardholders Buy Crypto Directly
British Tourist Dies Following Hair Transplant in Turkey, Police Investigate
WhatsApp Users Targeted in New Scam Involving Account Takeovers
Trump Deploys Nuclear Submarines After Threats from Former Russian President Medvedev
Germany’s Economic Breakdown and the Return of Militarization: From Industrial Collapse to a New Offensive Strategy
Germany Enters Fiscal Crisis as Cabinet Approves €174 Billion in New Debt
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
UN's Top Court Declares Environmental Protection a Legal Obligation Under International Law
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
President Trump Diagnosed with Chronic Venous Insufficiency After Leg Swelling
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
Iranian President Reportedly Injured During Israeli Strike on Secret Facility
Kurdistan Workers Party Takes Symbolic Step Towards Peace in Northern Iraq
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
AI Raises Alarms Over Long-Term Job Security
Russia Formally Recognizes Taliban Government in Afghanistan
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Mediators Edge Closer to Israel-Hamas Ceasefire Agreement
Germany Seeks Taliban Deal to Deport Afghan Migrants
Emirates Airline Expands Market Share with New $20 Million Campaign
Robots Compete in Football Tournament in China Amid Injuries
×