DUBAI: Saudi Arabia’s Fawaz Alhokair family aims to secure funding by next week to buy Saudi Oger’s 20.93 per cent stake in Arab Bank, banking sources said on Thursday, in a deal likely to be worth around $1.1 billion.

The final group of lenders has yet to be finalised for the deal, which has been agreed between the two companies subject to financing being secured by next week’s deadline, one of the sources, a Gulf-based banker, said.

If the funding is not secured by then, the family, best known for its fashion retail business, would seek an extension to the purchase agreement to secure the funding, the banker added.

Seeking extensions on transactions, whether for acquisitions or debt restructurings, is not uncommon in the Gulf, where negotiations traditionally happen at a slower pace than in the Western world.

Fawaz Abdulaziz Alhokair Co, Saudi Oger and Arab Bank didn’t immediately respond to requests for comment.

Fawaz Alhokair has emerged as the front-runner for the stake in the Jordan-based bank after construction giant Saudi Oger, owned by the family of Lebanese Prime Minister-designate Saad al-Hariri, began seeking buyers to help ease its cash flow problems bought on by woes in Saudi’s building sector.

The Arab Bank sale will help repay a $1.03 billion loan from regional and international banks due to mature in February.

Fawaz Alhokair is seeking around $750 million to $900 million through a syndicated loan, with the remainder of the acquisition funding to come from the family, two of the sources said.

The Gulf-based banker said the deal was being arranged by Arab National Bank and could include participation from other Saudi banks, as well as regional lenders including Emirates NBD, First Gulf Bank and Qatar National Bank.

Fawaz Alhokair acts as franchisee in the region for brands including Zara and Banana Republic, and also has interests in real estate and hospitality, as well as finance and investments through its FAS Capital arm.

A Saudi-based source said Fawaz Alhokair was keen on the deal as it wanted to diversify out of retail-linked assets at a time of slower growth in government and consumer spending as a result of the dip in oil prices.

Fawaz Alhokair’s profits in the second quarter slumped 81.1 per cent.

(Additional reporting by Davide Barbuscia, Reem Shamseddine in Khobar and Marwa Rashad in Riyadh; Editing by Adrian Croft)