DUBAI (Oct 3): A Saudi court on Sunday issued a final order on the restructuring of the Algosaibi family’s conglomerate AHAB, putting a formal end to one of Saudi Arabia’s largest and longest debt disputes.
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.
“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 totalling 27.5 billion riyals (about $7.3 billion), Charlton said.
The settlement assets include over 800 million riyals in cash, a portfolio of publicly traded shares worth about 3.7 billion riyals, 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.
The Algosaibis and Sanea – who married into the Algosaibi family – have been locked in a bitter dispute over who was to blame for the 2009 collapse of the companies.
“AHAB will continue to pursue its claims in the Saad estate and against Al Sanea, who it continues to hold responsible,” Charlton said.
AHAB was one of the first companies to apply for a restructuring under the new Saudi bankruptcy law.
Before the law, modern bankruptcy legislation did not exist in Saudi Arabia, meaning the main options for defaults were liquidation or cash injections.