Local contractor Saudi Oger has sold a 2.8 percent stake in Riyadh-listed Saudi Investment Bank, reducing its stake to 5.8 percent, according to Saudi Stock Exchange (Tadawul) data.

The bank, which offers retail, corporate, treasury and asset management services to its clients, has $2.62bn of market capitalisation at the close of trading on 16 April, which implies that the sale could be worth $73m. The buyer of the Oger stake was not named on Tadawul website.

The cash-strapped contractor has yet to make payments towards clearing its estimated SR13bn ($3.5bn) of debt. In November last year, Saudi Oger asked banks to freeze its loan repayments due to delays in the releasing of funds owed by the government. It is not clear if any of the banks had agreed to the debt standstill proposal with three local lenders – Alawwal Bank, Banque Saudi Fransi and Saudi British Bank (Sabb) – already taking full provisions on their exposure to the company, MEED reported in February.

The combined exposure of the three lenders amounts to between SR800 and SR900m to Oger. The others banks are likely to write their share of outstanding debt to Oger as non-performing loans over the coming quarters, a Riyadh-based banking source said.

Saudi Oger, along with Saudi Binladin Group (SBG), were the kingdom’s two largest contractors by turnover before the fall of oil price from its mid-2014 peak of $115 a barrel. The slum in crude prices to below $30 at the beginning of 2016 had forced the government to cut spending and withhold payments to the contractors for work already finished, which has starved the construction sector of operating cash.

Banks are unsure how much money Oger has received from the government when Riyadh released long-overdue payments to contractors late last year.

Oger, which is owned by the family of Lebanese Prime Minister Saad al-Hariri has not won any new work in recent quarter and resorted to laying off tens of thousands of employees last year to cut costs.

Saudi Oger also owed $800m to staff, sub-contractors and other creditors, according to media reports in August, and it is not clear how much of the that backlog it has been cleared since.

If the company fails, it could be the largest in the kingdom since the fallout from the 2008 global credit crunch.

The Lebanese-owned conglomerate is already working on stake sales in several subsidiaries. A group of investors has agreed to pay $1.12bn for its stake in Jordan’s Arab Bank.