Mecca developer Jabal Omar is in talks with lenders after failing to make a $173m loan repayment.

In a statement released on the Saudi Stock Exchange (Tadawul), the company said it failed to meet the first payment of an $800m state loan on 1 January.

The company said its sustainability depended on finding funds to repay short-term debts. The company has long-term debt of more than $2bn.

Jabal Omar, which is currently developing a number of projects in the Jabal Omar district near the holy mosque in Mecca, also said it plans to use a $240m credit facility from a local bank to cover the repayment.

In September 2015 MEED reported that the company also raised SR8bn ($2.1bn) to complete phase two (S3-4), phase four (S9-11) and phase 5 (S6-8) of the Jabal Omar development in Mecca.

The financing was extended by the local SABB, part owned by the UK’s HSBC, and Samba Financial Group. It also refinanced an earlier SR2bn ($500m) bridge loan from the same banks. The ten-year Islamic financing was secured on the land Jabal Omar Development is working on in Mecca.

Jabal Omar Development has been working since 2007 to secure all the financing for its 2.5 million-square-metre project, located near the Grand Mosque in Mecca. It secured SR1.35bn ($370m) of finance in 2010.

Jabal Omar’s shares, which dropped to a 21-month low in mid-January, were up 0.2 per cent as of yesterday, according to Tadawul listings.