JUL 5, 2018: Saudi businessmen Bakr, Saleh and Saad Binladin gave up their 36.2 pct stake in the Saudi Binladin Group to Istidama Holding Company, al-Arabiya TV reported on Thursday, citing the Saudi commerce ministry.
The company, crucial to the state’s plans for major tourism and infrastructure projects, is now being run by a government-appointed committee after several senior brothers were detained in an anti-corruption purge late last year.
The stocks transfer is part of a financial settlement with state authorities, sources told Reuters in March.
According to earlier reports, the group will be slimmed down and renamed, six sources familiar with the matter told Reuters in May.
The restructuring, expected to include hundreds of layoffs, is intended to streamline operations at the conglomerate, which has spawned more than 500 units ranging from construction to energy since its formation in 1931, said the sources, who are engaged in the process or have been informed about it.
As part of the reorganization, a new holding company will be formed with a new name, four of them said, without saying whether the name has been chosen or what it might be.
It appears the company is Istidama Holding Company which will also focus on leisure and overseas work including the NEOM, a huge new business zone on the Red Sea coast.
Binladin, which had over 100,000 employees at its peak, is undergoing the transformation after several members of the Binladin family that owns the company were detained in November as part of an anti-graft purge in the Kingdom which yielded more than $100 billion in assets.
One of the sources said the 537 business units under the current company set-up would be rationalized, which could include them being sold off, wound down or merged. The remaining units will be placed under the new structure, the source said.
Among the units expected to remain under the new holding company will be a contractor that will retain the Saudi Binladin name as well as operational maintenance, real estate, energy and advanced technology and business investments, two sources said.
In February, sources told Reuters that SBG has been awarded a contract in a project at NEOM.
Following the detention of the Binladin family members last year, the finance ministry had formed a five-member committee comprised of two other Binladin brothers and three independent businessmen to further restructure the firm.