Kingdom Tower, the Saudi skyscraper set to be the world’s tallest building, will probably have construction funding in place by the end of the first half, the developer’s chief executive officer said today.
The company is in talks to bring in Riyadh-based Alinma Bank as an adviser and lender, Mounib Hammoud, CEO of Jeddah Economic Co., told reporters today on the sidelines of a conference in Dubai. BNP Paribas (BNP) SA is currently advising the company, he said, without disclosing the size of loan being sought.
The builder has been looking for financing since at least April 2012, people familiar with the matter said at the time. They asked not to be named because the matter is private.
A spokesman for BNP Paribas declined to comment when contacted by Bloomberg. Calls to Alinma’s head office in Riyadh weren’t answered.
“The slogan of the company now is ‘it’s happening’ because, before I joined last September, people were asking whether the project is happening,” Hammoud said. “We are up and running.”
Kingdom Holding Co. (KINGDOM), Saudi Prince Alwaleed bin Talal’s investment company, and partners including tower builder Saudi Binladen Group are trying to arrange funding after investing 8.7 billion riyals ($2.3 billion) in the project, Hammoud said. They are seeking a bank loan with a maturity of five to seven years, he said.
Kingdom Tower, with a height of more than 1,000 meters (3,280 feet), will cost 6 billion riyals to build. The first phase of the Jeddah Economic City development, which includes the tower and the surrounding area may cost as much as much as 14 billion riyals, the CEO said.
“Raising money through bonds is on our minds, but that has perquisites and we are building them,” the CEO said. “Bonds need income and they need revenue, and that is coming.”
Underground work on the tower is complete, Hammoud said. Progress on the project is restoring confidence after doubts were raised about its viability, he said.
Saudi Binladen Group invested 1.5 billion riyals to gain a 16.6 percent stake in Jeddah Economic Co., the project’s owner. The building received final municipal approvals in 2012.
The skyscraper will include a Four Seasons hotel, apartments, offices, three lobbies on the upper floors and the world’s highest observation deck on the 157th level. It was designed by Adrian Smith, the Chicago architect responsible for the 828-meter Burj Khalifa, which opened in Dubai in 2010 and currently holds the record for the tallest building.
Bin Talal is the world’s 14th richest man, with a net worth of about $35 billion, according to the Bloomberg Billionaires Index.-Bloomberg