Thursday, 5 May 2016

4 Solutions to Saudi Binladin Group current Financial Crisis

All of us know that Saudi Binladin Group is in real trouble from last many months. They have not been able to pay salaries to their employees. I know many Saudi Binladin Group employees who have not been paid salaries from last 3 to 6 months. It all started after the crane incident which took place in Makkah causing death of more than 110 pilgrims. Government banned Saudi Binladin Group from awarding any new contracts which started a new world of difficulties for them. Few days ago on 30th April, we covered a story about Saudi Binladin group issuing final exit visas to its 50,000 employees without settling their dues. By the end of 2017, company’s payable balance and overdue payments are expected to reach SR 25 billion. Everyone is talking about the problems, but no one is coming with the solution. Actually there are 4 Solutions to Saudi Binladin Group current Financial Crisis.

4 Solutions to Saudi Binladin Group current Financial Crisis
  1. The first and easiest solution to quickly get out of financial crisis is to sell some real estate projects which are under different phases of development. In this way, Saudi Binladin Group would be able to collect some cash to pay off its debt and continue its operations in more cash generating projects.
  2. Saudi Binladin Group has won many new contracts of billions of riyals recently. Contractors need performance guarantee for the amount of around 10% to 15% of the value of the contract. In order to obtain performance guarantee, Saudi Binladin has to make a fixed deposit in the bank. If Saudi Binladin Group dispenses from these contracts on which they have not started working, they can utilized this amount of fixed deposit in their operations.
  3. The next solution is to sale its 60% shares to the government. It is important to mention here that major receivable of Saudi Binladin Group is the government. If government buys 60% shares in Saudi Binladin Group, the control will be in the hands of Government. Government is still paying salaries to its employees on time. Moreover, since it will be a government entity, they will release payments to them resulting in collection of overdue receivables.
  4. The last but not the least solution to solve problems of Saudi Binladin Group is to declare bankruptcy. When you're bankrupt, your non-essential assets (property and possessions) and excess income are used to pay off your creditors (those you owe money to). At the end of the bankruptcy period, most debts are 'discharged' (cancelled). In this way, Saudi Binladin Group would be able to pay off its liabilities including payments to employees.

Latest News: Other Latest News
  1. Saudi Binladin group issues 50,000 Final Exit Visas to workers without final dues
  2. Saudi Binladin Group to terminate 15,000 Employees this year
  3. How Crane fell down in Makkah and took 111 lives and left 331 injured?
  4. Saudi Binladin Group makes 3 points proposal to its Expatriate Employees
  5. 10 Mega KSA Construction Projects you should be involved in


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