DUBAI — Saudi Arabia’s largest and longest debt saga, fuelled by a feud that has split one of its richest families, could be nearing a resolution after a court approved about US$14 billion in claims related to the collapse of two business empires a decade ago.The Saudi court has accepted more than US$7 billion in…


DUBAI — Saudi Arabia’s largest and longest debt saga, fuelled by a feud that has split one of its richest families, could be nearing a resolution after a court approved about US$14 billion in claims related to the collapse of two business empires a decade ago.

The Saudi court has accepted more than US$7 billion in claims from creditors against the Algosaibi family’s conglomerate AHAB, and about US$6.5 billion against tycoon Maan al-Sanea and his company Saad Group, two court documents seen by Reuters showed.

The Algosaibis and Sanea – who married into the Algosaibi family – have been locked into a bitter dispute over who was to blame for the 2009 collapse of the companies.

Both sides deny wrongdoing, but the demise of the two companies nonetheless left dozens of local and international banks with billions of dollars of unpaid debt.

A court-driven end to the saga would not only offer some relief to those creditors, but more broadly would be an important sign to international investors, as the cases would be resolved under a new bankruptcy law introduced in 2018 as part of reforms aimed at making the kingdom more investor friendly.

The Dammam Commercial Court last week approved more than US$7 billion of claims against AHAB (Ahmad Hamad Algosaibi and Bros.) out of nearly US$12 billion in total claims listed, according to one of the documents seen by Reuters.

In December the court approved around US$6.5 billion of claims against Sanea and Saad out of nearly US$18 billion of listed claims, excluding those filed by the group’s employees, according to a separate document.

Simon Charlton, chief restructuring officer at AHAB, confirmed the approval of the claims against the company.

“The trustee has requested the court for permission to form a creditors committee and we hope that we can get a committee formed quickly and then finalize a proposal with a target to get a creditor vote on a proposal that can be presented to the court for ratification within 90 days,” he told Reuters.

A legal representative for Saad Group and Sanea did not immediately respond to a request for comment. The Saudi government’s media office also did not immediately respond.

The approved creditors’ demands will now be included in restructuring proposals which the debtors and representatives of their respective lenders will submit to the court.

The court approved claims from over 70 financial institutions in the AHAB case, including Saudi and regional banks, and international lenders such as BNP Paribas, Deutsche Bank, HSBC and JPMorgan, the document showed.

But it rejected two of four claims by The International Bank Corporation (TIBC), a Bahraini bank which has around US$3 billion in claims against AHAB. The bank had raised money in international markets, transferring the funds to AHAB.

Some US$1.8 billion worth of TIBC claims were approved out of the US$3 billion, according to the court document.

A spokesman for the administrators of TIBC, whose default in 2009 was at the center of Saudi Arabia’s financial meltdown that year, said they planned to appeal against the court’s rejection of two of its claims “as they represent claims that are no less worthy than the other two.”

© Thomson Reuters 2020

                  <div class="clearfix"></div>                <div class="sub-section">           <div class="shortcut-comment">                                  <div class="title-container">                       <div class="viafoura">                          <span class="vf-counter vf-widget" data-widget="counter"></span>                            <div class="title">Comments</div>                       </div>                      <span class="subtitle">Join the conversation</span>                     <span class="arrow"> &rarr;</span>                  </div>                          </div>      </div>                                                                                                                                                                                                                          Photos provided by the company to the Financial Post show dozens of trees felled along a forestry service road in the contested area                                            BMO, TD, CIBC and Scotiabank also weigh in on issues facing banking sector                                          CFIB audit found 40% chance of receiving incomplete or incorrect information                                            The Liberals spent five years pandering to environmental, regional or anti-capitalist interests. Now in a minority position, the situation will worsen                  

Source Link

Categories: Finance Saudi split

Leave a Reply

Leave a Reply

  Subscribe  
Notify of