Saudi Arabia needs loan for civil planes
Saudi Arabia, Business, 11/20/1997

Saudi banking sources announced last week that the kingdom decided to ask for a loan from foreign banks to finance buying new planes for its airline company. This declaration drew the attention of economic analysts as Saudi Arabia is considered the major country in producion and exporting of oil and has asked for the second time for a loan from a foreign bank.

In its first loan, Saudi Arabia borrowed $4.5 billion in 1991 to finance a part of the military allies expenses during the Gulf War in the same year. This time Riyadh is intending to borrow $4.3 billion from outside and borrow the rest from local banks in order to get $7.5 billion dollars specified to buy 91 civil planes produced by the American Boeing and McDonnell Douglas companies.

Banking sources said that the Saudi government preferred this option because it has other financial expenses, such as paying back the internal department and its military expenses.

The sources added that buying the planes is in accordance with the governmental plan which aims to support the airline company, which is suffering from financial difficulties.

Saudi Arabia intends to privatize the Saudi airline, which is considered one of the biggest companies in the Gulf.

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