Wednesday, 29 May 2024

Ending 12-year debt dispute, Saudi court issues final order on Algosaibi group


Dammam commercial court on Sunday issued a final order on the restructuring of Saudi conglomerate Ahmad Hamad Algosaibi and Brothers (AHAB), putting a formal end to one of Saudi Arabia’s largest and longest debt disputes.

Ahmad Hamad Algosaibi and Brothers (AHAB) filed for a financial restructuring in 2019 under the framework of Saudi Arabia’s bankruptcy law, introduced the previous year to make the kingdom more investor-friendly.

The Dammam commercial court on Sunday issued the final ratification order for the AHAB restructuring, which is now unappealable, Simon Charlton, chief restructuring officer at AHAB, told Reuters.

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“The company will now take steps to begin lifting the restrictions over assets and begin liquidating assets to be able to make distributions to its approved creditors,” he said.

AHAB’s creditors include local, regional and international banks. About a third of the firm’s debt has been traded for years by banks’ trading desks and hedge funds.

Under the settlement, AHAB’s creditors are expected to receive about 26 cents on the dollar for debt claims totaling SR27.5 billion (about $7.3 billion), Charlton said.

The settlement assets include over 800 million riyals in cash, a portfolio of publicly traded shares worth about SR3.7 billion, and real estate assets in Saudi Arabia.

The company will retain its core operating assets and plans to rebuild those businesses and the restructured group, possibly by raising external financing, Charlton said, adding that funding plans were at an early stage.

Creditors have been pursuing AHAB and Saad Group, a Saudi conglomerate owned by tycoon Maan al-Sanea, since they defaulted on about $22 billion in combined debt in 2009.