Saudi Oger is speaking with potential buyers to sell its stake in Jordan’s Arab Bank in a deal that could help raise about $1bn for the contracting giant, struggling with the financial difficulties

A small number of prospective buyers from Saudi Arabia and the wider Middle East have started negotiations for its 20.93 per cent stake in the bank, according to the news agency Reuters, which cited sources aware of the matter,

Spokeswoman of Arab Bank and a spokesman for Saudi Oger, which is owned by the family of former Lebanese Prime Minister Saad Hariri, did not respond to requests for comment. Hariri’s political offices in Beirut also declined to comment, according to the report.

Among the interested parties are Saudi Arabia’s Al-Hokair family which also runs a fashion retail business and has the Middle Eastern franchisee for brands including Zara and Banana Republic. Another possible buyer has contacted banks about raising between $700m to $1bn to finance a bid.

Oger’s stake is the largest single holding and would be worth about JD815.4m ($1.15bn) but the sale process could fetch a bit less less due as the contractor is distressed seller. It could, however, cover a $1.03bn loan with regional and international banks that is due to mature in February.

Oger’s stake in the lender is held as collateral for the loan, which means, the creditor would have to give approval for sale. The loan facility was extended by banks including Deutsche Bank and Emirates NBD among others

Oger owes about SR15bn ($4bn) to banks, plus billions more to contractors, suppliers and employees, Oger Telecom, 55 per cent owned by  Saudi Oger, missed an interest payment on a $4.75bn loan at the end of September, according to the news report.

Saudi Oger and Saudi Binladin Group (SBG) were at the forefront of the government’s drive to build the country’s infrastructure. The contractors which mainly relied on multi-billion-dollar state contracting, ran into financial difficulties when Riyadh capped award of new projects and stopped payments for the work already finished as it grappled with the dwindling oil revenues and widening budget deficit on the back of the lower crude prices.

Both contractors had to lay off thousands of employees, many of which were stranded at the labour camps in the kingdom for months without money for food or access to medical help, which attracted criticism from several foreign government.